ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended October 31,
2012

or

¨

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________
to ________________.

Commission File Number 0-13301

RF INDUSTRIES, LTD.

(Name of registrant as specified in its
charter)

Nevada

88-0168936

(State or other jurisdiction

(I.R.S. Employer Identification No.)

of incorporation or organization)

7610 Miramar Road, Bldg. 6000, San Diego,
California 92126-4202

(Address of principal executive offices)
(Zip Code)

(858) 549-6340

(Registrant’s telephone number,
including area code)

Securities registered pursuant to Section 12(b)
of the Act:

Common Stock, $.01 par value.

Securities registered pursuant to Section 12(g)
of the Act: None

Indicate
by check mark if the registrant is a well known seasoned issuer, as defined in Rule 405 of the Securities Act.
¨ Yes
x No

Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
¨ Yes
x No

Indicate
by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days. x
Yes ¨
No

Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files). x
Yes ¨
No

Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulations S-K (§229.405 of this chapter) is not
contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨

Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company in Rule 12b-2 of the
Exchange Act.

Large Accelerated Filer

¨

Accelerated Filer

¨

Non-accelerated Filer

¨

(Do not check if a smaller reporting company)

Smaller reporting company

x

Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
¨ Yes
x No

State the aggregate market value of the
voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last
sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently
completed second fiscal quarter. $25,724,291.

On January14,
2013, the Registrant had 7,215,020 outstanding shares of Common Stock, $.01 par value.

Forward-Looking Statements:

Certain statements in this Annual Report
on Form 10-K, and other oral and written statements made by the Company from time to time are “forward looking statements”
within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, including those that discuss strategies,
goals, outlook or other non-historical matters, or projected revenues, income, returns or other financial measures. In some cases
forward-looking statements can be identified by terminology such as “may,” “will,” “should,”
“except,” “plan,” “anticipate,” “believe,” “estimate,” “predict,”
“potential” or “continue,” the negative of such terms or other comparable terminology. These forward-looking
statements are subject to numerous risks and uncertainties that may cause actual results to differ materially from those contained
in such statements. Among the most important of these risks and uncertainties are the ability of the Company to continue to source
its raw materials and products from its suppliers and manufacturers, the market demand for its products, which market demand is
dependent to a large part on the state of the telecommunications industry, the Company’s dependence on the success of its
largest division, and competition.

Important factors which may cause actual
results to differ materially from the forward looking statements are described in the Section entitled “Risk Factors”
in the Form 10-K, and other risks identified from time to time in the Company’s filings with the Securities and Exchange
Commission, press releases and other communications. The Company assumes no obligation to update these forward-looking statements
to reflect actual results or changes in factors or assumptions affecting such forward-looking statements.

PART I

ITEM 1.

BUSINESS

General

RF Industries, Ltd., together with its wholly-owned
subsidiary (collectively, hereinafter the “Company”), primarily engages in the design, manufacture, and marketing of
interconnect products and systems, including coaxial and specialty cables, fiber optic cables and connectors, and electrical and
electronic specialty cables. The Company’s wireless operations also design, manufacture and sell radio-frequency
(RF) wireless modems and provide mobile management solutions for wireless networks. For internal operational purposes, and for
marketing purposes, the Company currently classifies its operations into the following seven divisions. The five interconnect product
divisions consist of the following: (i) The Connector and Cable Assembly Division designs, manufactures and distributes coaxial
connectors and cable assemblies that are integrated with coaxial connectors; (ii) the Aviel Electronics Division designs, manufactures
and distributes specialty and custom RF connectors primarily for aerospace and military customers, (iii) the Oddcables.com Division
primarily sells coaxial, fiberoptic, and other connectors and cable assemblies on a retail basis to local multi-media and communications
customers; (iv) the Bioconnect Division manufactures and distributes cabling and interconnect products to the medical monitoring
market; and (v) the Cables Unlimited Division manufactures custom and standard cable assemblies, complex hybrid fiber optic power
solution cables, adapters, and electromechanical wiring harnesses for communication, computer, LAN, automotive and medical equipment.
The Cables Unlimited Division is a Corning Cables Systems CAH Connections SM Gold Program member, authorized to manufacture fiber
optic cable assemblies that are backed by Corning Cables Systems’ extended warranty. The two wireless products and systems
divisions consist of the following: (i) The Neulink Division is engaged in the design, manufacture and sale of RF data links and
wireless modems for receiving and transmitting control signals for remote operation and monitoring of equipment, personnel and
monitoring services; and (ii) the RadioMobile Division is an original equipment manufacturer (OEM) provider of end-to-end mobile
management solutions implemented over wireless networks that supplement the operations of the Company’s Neulink division.

The Company’s principal executive
office is located at 7610 Miramar Road, Building #6000, San Diego, California. The Company was incorporated in the State of Nevada
on November 1, 1979, completed its initial public offering in March 1984 under the name Celltronics, Inc., and changed its name
to RF Industries, Ltd. in November 1990. Unless the context requires otherwise, references to the “Company” in this
report include RF Industries, Ltd., Cables Unlimited, Inc., a New York company and a wholly-owned subsidiary, and the divisions
of RF Industries, Ltd.

On March 10, 2011, RF Industries, Ltd. effected
a two-for-one stock split. All common stock and per share information (other than par value) contained in this Annual Report
has been adjusted to reflect the foregoing stock split.

The Company’s principal Internet website
is located at http://www.rfindustries.com. The Company’s annual reports, quarterly reports, current reports on Form 8-K and
amendments to such reports filed or furnished pursuant to section 13(a) or 15(d) of the Securities and Exchange Act of 1934, as
amended (the “Exchange Act”), and other information related to the Company, are available, free of charge, on that
website as soon as we electronically file those documents with, or otherwise furnish them to, the Securities and Exchange Commission.
The Company’s Internet website and the information contained therein, or connected thereto, are not and are not intended
to be incorporated into this Annual Report on Form 10-K.

1

Operating Divisions

Connector and Cable Division The
Connector and Cable Division is engaged in the design, manufacture and distribution of coaxial connector solutions for companies
that design, build, operate, maintain and use wireless voice, data, messaging, and location tracking systems. Coaxial
connector products consist primarily of connectors which, when attached to a coaxial cable, facilitate the transmission of analog
and digital signals in various frequencies. Although most of the connectors are designed to fit standard products, the Company
also sells custom connectors specifically designed and manufactured to suit its customers’ requirements such as the Wi-Fi
and broadband wireless markets. The Company’s Connector and Cable Division typically carries over 1,200 connectors, adapters,
tools, assembly, test and measurements kits. The Company’s RF connectors are used in thousands of different devices,
products and types of equipment. While the models and types of devices, products and equipment may change from year to year, the
demand for the types of connectors used in such products and offered by the Company does not fluctuate with the changes in the
end product incorporating the connectors. In addition, since the Company’s standard connectors can be used in a number of
different products and devices, the discontinuation of one product does not make the Company’s connectors obsolete. Accordingly,
most connectors carried by the Company can be marketed for a number of years and are only gradually phased out. Furthermore, because
the Company’s connector products are not dependent on any line of products or any market segment, the Company’s overall
sales of connectors do not fluctuate materially when there are changes to any product line or market segment. Sales of the Company’s
connector products are, however, dependent upon the overall economy, infrastructure build out by large telecommunications firms
and on the Company’s ability to market its products.

The Company designs its connectors at its
headquarters in San Diego, California. However, most of the RF connectors are manufactured by third party foreign manufacturers
located in Asia.

The Company has been designing, producing
and selling coaxial connectors since 1987 and the Connector and Cable Division therefore represents the Company’s oldest
and most established division. The Connector and Cable Division has historically generated, and continues to generate the majority
of the Company’s net sales and net income. However, as a result of the acquisition of Cables Unlimited, and growth of that
division, plus the continued growth of a number of the other divisions, the Connector and Cable Division no longer represents a
majority of the Company’s revenues and no longer generates a majority of the Company’s net income. During the current
fiscal year, the Connectors and Cable Assembly segment represented approximately $14,176,000, or approximately 47% of the Company’s
net sales.

Cable assembly products consist of various
types of coaxial cables that are attached to connectors (usually the Company’s connectors) for use in a variety of communications
applications. Cable assemblies manufactured for the Cable and Connector Division are manufactured at the Company’s California
facilities using state of the art automation equipment and are sold through distributors or directly to major OEM accounts. Cable
assemblies consist of both standard cable assemblies and assemblies that are custom manufactured for the Company’s clients.
The Company offers a line of cable assemblies with over 100,000 cable product combinations. The Company launched its cable assembly
operations in 2000, and cable assembly products constituted the third largest source of revenues for the Company during the fiscal
year ended October 31, 2012.

Aviel Electronics Division The
Aviel Electronics Division is primarily engaged in the design, manufacture and sale of custom, specialty or precision connectors
and cable systems for specialized purposes, such as commercial aerospace and military systems. Aviel has a 50 year history of serving
the microwave transmission industries, and is an approved vendor to leading aerospace, electronics, OEM’s and government
agencies in the United States and abroad. Aviel complements the Company’s Connector and Cable Division’s capabilities
by providing additional custom design and manufacturing capabilities, thereby expanding the Company’s products in the military
and commercial aerospace markets, and expanding the Company’s overall client base. Aviel’s operations, including its
manufacturing facilities, are based in Las Vegas, Nevada.

Oddcables.com Division Oddcables.com
(formerly known as Worswick) sells coaxial connector solutions and manufactures RF cable assemblies for both individual customers
and companies that design, build, operate, and maintain personal and private multi-media, wireless voice, data and messaging systems.
Oddcables.com primarily sells its products on a retail basis at its retail outlet in San Diego, California. Oddcables.com,
however, also sells its products on-line under the e-commerce brand Oddcables.com. This division recently also commenced designing,
manufacturing and selling precision-grade, high frequency connectors and adapters for OEM, military and metrology lab applications
as well as 10GHz high frequency fiber optic patch cable assemblies. Oddcables.com was a privately held, 20-year old California
company based in San Diego before its acquisition by the Company in September 2005.

Cables Unlimited Division On June
15, 2011, RF Industries, Ltd. acquired all of the issued and outstanding capital stock of Cables Unlimited, Inc., a New York corporation.
The Cables Unlimited division is an established custom cable manufacturer based in Yaphank, New York. Cables Unlimited, Inc. is
a Corning Cable Systems CAH Connections SM Gold Program member, authorized to manufacture fiber optic products that are backed
by Corning Cable Systems' extended warranty. The products manufactured by Cables Unlimited, Inc. include custom and standard fiber
optic cable assemblies, adapters and electromechanical wiring harnesses for communications, computer, LAN, automotive fiber optic
and medical equipment. During 2012, Cables Unlimited introduced a new cabling product known as OptiFlex. The OptiFlex cable is
a hybrid power and communications cable designed and built for wireless service providers who are updating their networks to 4G
technologies such as WiMAX, LTE and other technologies.

2

Bioconnect Division The
Bioconnect Division is engaged in product development, design, manufacture and sale of high-end or specialty cables and interconnects
for medical monitoring applications, such as disposable ECG cables, EEG leads, infant apnea monitors in hospitals, patient leads,
snap leads and connecting wires. Bioconnect’s products typically do not directly compete against the mass-produced,
lower priced standard medical cables used by medical facilities. The Company acquired the Bioconnect operations in 2000.

RF Neulink Division The
RF Neulink Division has, since 1984, designed and manufactured, through outside contractors, wireless data products commonly known
as RF data links and wireless modems. These radio modems and receivers provide high-speed wireless connections over longer distances
where wire connections may not be desirable or feasible. In addition to selling its own radio modem, RF Neulink also distributes
antennas, transceivers and related products of other manufacturers. RF Neulink’s small point-to-point systems and large systems
of wireless data networks are used by banks, gas and oil, casinos, military units, government agencies, and manufacturing plants.
The RF Neulink Division also offers complete turn-key packages for numerous remote data transmission applications.

RadioMobile Division The RadioMobile
Division is an OEM provider of end-to-end mobile management solutions implemented over wireless networks. Although the RadioMobile
Division operates as a separate division, its operations supplement the operations of the Company’s Neulink division. In
November 2011, RadioMobile Division was awarded a $2.6 million contract from the Los Angeles County Fire Department for the implementation
of a wireless system upgrade to the County Fire Department's existing remote communications equipment. The Company acquired substantially
all of the assets and assumed certain liabilities of RadioMobile Inc., a privately held company in San Diego, California on September
1, 2007.

For financial reporting purposes, the Company
aggregates its operations into four segments. (1) Connector and Cable Assembly, Aviel Electronics, and Oddcables.com divisions
are aggregated into one reporting segment (the RF Connector and Cables Assembly segment) because they have similar economic characteristics,
while (2) RF Neulink and RadioMobile are aggregated in the RF Wireless segment. (3) Bioconnect makes up the Company’s Medical
Cabling and Interconnector segment. (4) The Cables Unlimited division constitutes the Company’s newest fiber optic and power/electronic
cabling segment, which we refer to as the Cables Unlimited segment.

Product Description

The Company produces a broad range of interconnect
products and assemblies. The products that are offered and sold by the Company’s various divisions consist of the following:

Connector and Cable Products

The Company’s Connector and Cable
Division designs, manufactures and markets a broad range of coaxial connectors and coaxial cable assemblies for the
numerous products with applications in commercial, industrial, automotive, transportation, scientific, aerospace and
military markets. Various types of connectors are offered by the RF Connector Division including 2.4mm and 3.5mm, 7-16 DIN, BNC,
MCX, MHV, Mini-UHF, MMCX, N, SMA, SMB, TNC, QMA and UHF. These connectors are offered in several configurations and cable attachment
methods for customer applications. There are numerous applications for these connectors, some of which include digital applications,
2.5G, 3G, 4G, Wi-MAX, LTE and other broadband wireless infrastructure, GPS (Global Positioning Systems), mobile radio products,
aircraft, video surveillance systems, cable assemblies and test equipment. Users of the Company’s connectors include telecommunications
companies, circuit board manufacturers, OEM, consumer electronics manufacturers, audio and video product manufacturers and installers,
and satellite companies. The Connector Division markets over 1,200 types of connectors, adapters, tools, assembly, test and measurement
kits, which range in price from under $1 to over $1,000 per unit. The kits satisfy a variety of applications including, but not
limited to, lab operations, site requirements, and adapter needs.

The Connector Division designs and sells
a variety of connector tools and hand tools that are assembled into kits used by lab and field technicians, R&D technicians
and engineers. The Company also designs and offers some of its own tools, which differ from those offered elsewhere in the market.
These tools are manufactured for the Company by outside contractors. Tool products are carried as an accommodation to the Company’s
customers and have not materially contributed to the Company’s revenues.

The Cable Assembly component of the Connector
and Cable Division markets and manufactures cable assemblies in a variety of sizes and combinations of RF coaxial connectors and
coax cabling. Cabling is purchased from a variety of major unaffiliated suppliers and is assembled predominately with the Company’s
connectors or other brands of connectors as complete cable assemblies. Coaxial cable assemblies have numerous applications including
wireless and wireless local area networks, wide area networks, Internet systems, PCS/cellular systems including 2.5G, 3G, 4G, Wi-MAX,
LTE wireless infrastructure, TV/dish network systems, test equipment, military/aerospace (mil-standard and COTS (Commercial Off
The Shelf)) and entertainment systems. Cable assemblies are manufactured to customer requirements.

Aviel Electronics Products

The Aviel Electronics Division designs,
manufactures and sells specialized and custom designed RF coaxial connectors. Aviel’s standard configuration and custom connectors
include connectors ranging from standard, miniature, sub-miniature and unique interfaces. Aviel also specializes in the design
and manufacture of custom and non-standard configurations required for specific applications as well as hard to locate and discontinued
connectors for commercial, aerospace, military and other unique applications. The Aviel division also manufactures precision-grade,
high frequency connectors and adapters that are sold by the Oddcables.com division.

3

Oddcables.com Products

Oddcables.com sells coaxial connectors and
cable assemblies for numerous multi-media products, devices and instruments in the local San Diego, California, area. Oddcables.com
also produces and markets cable assemblies in a variety of sizes and combinations of RF coaxial connectors and coaxial cabling
including 10 GHz high frequency fiber optic patch cable assemblies. Cabling is purchased from a variety of major unaffiliated suppliers
and is assembled with the Company’s connectors or third party connectors as complete cable assemblies. Coaxial cable assemblies
have thousands of applications including local area networks, wide area networks, Internet systems, PCS/cellular systems, TV/dish
network systems, test equipment, military/aerospace (mil-standard and COTS (Commercial Off The Shelf)) and entertainment systems.
Most cable assemblies are manufactured to the purchaser’s specifications.

Cables Unlimited Products

Cables Unlimited is an International Standards
Organization (ISO) approved factory that manufactures custom cable assemblies. Cables Unlimited is also a Corning Cable Systems
CAH Connections SM Gold Program member, authorized to manufacture fiber optic products that are backed by Corning Cable Systems'
extended warranty. Products manufactured by Cables Unlimited include custom fiber optic cable assemblies, adapters and electromechanical
wiring harnesses for telecommunications, computer, LAN, automotive and medical equipment companies. Cables Unlimited also provides
fiber optic and cable installation services in the New York regional area. Service revenues represented approximately 7% of Cables
Unlimited’s total revenues for the fiscal year ended October 31, 2012. During the fiscal year ended October 31, 2012, Cables
Unlimited developed and commercially released a cabling solution for wireless service providers engaged in upgrading their cell
towers for 4G technologies. The custom hybrid cable, called OptiFlex, is significantly lighter and possesses greater flexibility
than cables previously used for wireless service.

The acquisition of Cables Unlimited in 2011
gives the Company the ability to offer a broad range of interconnect products and systems that the Company’s largest customers
had sought, but that the Company previously was unable to provide. These interconnect systems have the ability to combine radio
frequency and fiber optic interconnect components, with various connectors and power cables through customized solutions for these
customers. The Company intends to actively market its ability to provide these fiber optic interconnect solutions to its larger
customers.

Bioconnect Products

Bioconnect designs, manufactures, sells
and provides product development services to OEMs for standard and custom cable assemblies, adapters and electromechanical wiring
harnesses for medical market and computer industries. These products consist primarily of patient monitoring cables, ECG cables,
snap leads, and molded safety leads for neonatal monitoring electrodes. The products, which are used in hospitals, clinics, doctor
offices, ambulances and at home are frequently replaced in order to ensure maximum performance of medical diagnostic equipment.

RF Neulink Products

The wireless data products available from
the RF Neulink Division come in a variety of configurations to satisfy the requirements of certain high-speed wireless connection
markets. Transmitter and receiver modules come in a wide range of power output and frequency ranges and are used to transmit data,
video or voice information from point to point. Additionally, standard or smart programmable modems are available in a wide range
of speeds and frequency/price ranges. Accessory modules have been developed for remotely controlling and monitoring electrical
devices.

The products sold by the RF Neulink Division
include both its own products and products of other manufacturers that are distributed by the Neulink Division. Current applications
in use for Neulink products are various and include seismic and volcanic monitoring, industrial remote censoring/control in oil
fields, pipelines and warehousing, lottery remote terminals, various military applications, remote camera control and tracking,
perimeter and security system control/monitoring, water and waste management, inventory control, HVAC remote control and monitoring,
biomedical hazardous material monitoring, fish farming automation of food dispensing, water aeration and monitoring, remote emergency
generator startup and monitoring, and police usage for mobile warrant database access. The Federal Communications Commission (FCC)
has mandated that, as of January 1, 2013, all public safety and business industrial land mobile radio systems operating in the
150-174 MHz (VHF) and 421-512 MHz (UHF) radio bands must cease operating using 25 kHz radio systems technology, and must begin
operating using at least 12.5 kHz. Systems using the 25kHz systems were to be replaced by the end of 2012. RF Neulink designs and
manufactures wireless radio modems that comply with the FCC’s narrowband mandate as systems are still being replaced to comply
with the FCC mandate.

4

RadioMobile Products

RadioMobile provides complete hardware and
software solutions for wireless mobile data management applications. Most of RadioMobile systems are custom engineered and designed
for specific markets. RadioMobile’s sales consist of a package of hardware, software and networking products as well as design
and installation services related to those applications. The primary markets for RadioMobile’s systems include public safety
(police, fire, and emergency medical services) and utilities and transportation (rail, bus, taxi and courier services). Software
applications for both host (Computer Aided Dispatch) and mobile environments are developed by in-house engineers and contractors.

In November 2011, the RadioMobile Division
was awarded a $2.6 million contract from the Los Angeles County Fire Department for the implementation of a wireless system upgrade
to the County Fire Department's existing remote communications equipment. Under this contract, RadioMobile is required to replicate
the County's existing technology and simultaneously implement a high speed data solution satisfying FCC Narrowband requirements.
RadioMobile is required to perform this wireless upgrade without downtime, without interrupting emergency services and without
the provision of additional frequencies or wireless sites during the transition period. RadioMobile’s mobile applications
are required to exactly mimic the Fire Department’s current Cathode Ray Tube-based 1985 functions, thereby eliminating retraining
expenses for thousands of fire personnel. The L.A. County Fire Department agreement is expected to be completed during the first
calendar quarter of 2013. As of October 31, 2012, RadioMobile has generated approximately $1.6 million of revenues associated with
the Los Angeles County contract.

Foreign Sales

Direct export sales by the Company to foreign
customers accounted for $1,611,000 or approximately 5% of Company’s sales for the fiscal year ended October 31, 2012. Foreign
sales accounted for $2,103,000 or approximately 11% of Company’s sales for the fiscal year ended October 31, 2011. The majority
of the export sales during these periods were to Canada, Israel and Mexico. Foreign sales orders from individual customers tend
to be larger than U.S. product orders and therefore have a larger impact on the Company’s sales.

The Company does not own, or directly operate
any manufacturing operations or sales offices in foreign countries.

Distribution, Marketing and Customers

Sales methods vary greatly between the Company’s
divisions. The Connector and Cable Assembly division and the Cables Unlimited division currently sell their products primarily
through warehousing distributors and OEM customers who utilize coaxial connectors and cable assemblies in the manufacture of their
products.

The Aviel Division sells its products to
its own customers and to customers referred through the Connector and Cable Division. The Aviel and Connector and Connector divisions
sell to similar customer market segments and combine marketing efforts where economically advantageous.

The Oddcables.com division operates from
a single retail, store-front location in San Diego and sells primarily to walk-in or local multi-media (video, voice, gaming, etc.)
and communications systems customers. This division also operates an e-commerce website called Oddcables.com that it launched in
2007 for the distribution of its products.

The Bioconnect group markets its products
to the medical market through major hospital suppliers, dealers and distributors. The Bioconnect Division also sells its products
to OEMs who incorporate the leads and cables into their product offerings.

The Neulink Division sells its products
directly or through manufacturers representatives, system integrators and OEM’s. System integrators and OEMs integrate and/or
mate Company’s products with their hardware and software to produce turnkey wireless systems. These systems are then either
sold or leased to other companies or organizations, including utility companies, financial institutions, petrochemical companies,
the U.S. military, government agencies, and irrigation/water management companies.

The RadioMobile division sells its products
directly and through value added resellers and dealers. Customers include municipalities for their police, fire, and emergency
medical services, departments, as well as private rail, bus, taxi and courier services.

Manufacturing

The Company contracts with outside third
parties for the manufacture of a significant portion of its coaxial connectors and for all the components of its Neulink products.
However, virtually all of the RF cable assemblies sold by the Connector and Cable Assembly Division during the fiscal year ended
October 31, 2012 were assembled by that division at the Company’s facilities in California. The Neulink products are assembled
at the Company’s California facilities. The Connector and Cable Division has its cables manufactured at numerous International
Standards Organization (ISO) approved factories with plants in the United States and Taiwan. The Company is dependent on a few
manufacturers for its coaxial connectors and cable assemblies. Although the Company does not have manufacturing agreements with
these manufacturers for its connectors, cable and Neulink products, the Company does have long-term purchasing relationships with
these manufacturers. The Company has in-house design engineers who create the engineering drawings for fabrication and assembly
of connectors and cable assemblies and certain of the components of its Neulink products. Accordingly, the manufacturers are not
primarily responsible for design work related to the manufacture of the connectors and cable assemblies. However, the third party
manufacturers of the Neulink products are solely responsible for design work related to the manufacture of the Neulink Division’s
products. Neulink products are manufactured by numerous manufacturers in the United States, and the Company is not dependent on
one or a few manufacturers for its Neulink products.

5

The Bioconnect Division has designed and
manufactured its own products for over 24 years (including as an unaffiliated company before being acquired by the Company in 2000).
Bioconnect products are manufactured by the Company at its own California facilities. The manufacturing process for the Bioconnect
medical cables includes all aspects of the product, from the design to mold design, mold fabrication, assembly and testing. The
Bioconnect product line produces its medical interconnect products in both high volume manufacturing and for custom or low volume
uses.

The Aviel Electronics Division manufactures
connectors at its Las Vegas, Nevada manufacturing facility. The Aviel Electronics Division has designed and manufactured its own
products for over 50 years (including as an unaffiliated company before being acquired by the Company in August 2004). The manufacturing
process for the Aviel connectors includes all aspects of the product from design, tooling, fabrication, assembly and testing. The
Aviel Electronics product line produces its connector products for low volume custom manufacturing uses, for the military, aerospace,
communications and other unique applications.

The Oddcables.com Division designs and produces
low to medium volume connector and cable assemblies for local and niche customers, as well as a few medium and large market customers.
These services are performed in San Diego, California.

The RadioMobile Division products are purchased
from various U.S. and overseas suppliers. Some products are designed and manufactured by third party manufacturers to RadioMobile’s
specifications. The Company’s in-house software designers designs much of the software used in its RadioMobile systems.

Cables Unlimited manufactures its custom
cable assemblies, adapters and electromechanical wiring harnesses and other products in its Yaphank, New York manufacturing facility.
Cables Unlimited is an International Standards Organization (ISO) approved factory, as well as a Corning Cable Systems CAH Connections
SM Gold Program member, authorized to manufacture fiber optic products and assemblies that are backed by Corning Cable Systems'
extended warranty. Cables Unlimited outsources the assembly of a portion of its new OptiFlex cable to a third party manufacturer.
The final assembly and termination of the OptiFlex cable is completed by Cables Unlimited at its Yaphank, New York facilities.

There are certain risks associated with
the Company’s dependence on third party manufacturers for some of its products, including reduced control over delivery schedules,
quality assurance, manufacturing costs, and the potential lack of adequate capacity during periods of excess demand and increases
in prices. See “Risk Factors” below.

Raw Materials

Connector materials are typically made of
commodity metals such as copper, brass and zinc and include small applications of precious materials, including silver and gold.
The Connector and Cable Division purchases most of its connector products from contract manufacturers located in Asia and the United
States. The Company believes that the raw materials used in its products are readily available and that the Company is not currently
dependent on any supplier for its raw materials. The Company does not currently have any long-term purchase or supply agreements
with its connector or Neulink product suppliers. The RF Connector and Cable assembly division obtains coaxial connectors from RF
Connector. The Company believes there are numerous domestic and international suppliers of coaxial connectors.

Neulink purchases its electronic products
from various U.S. suppliers, and all Neulink wireless modem transceivers are built in the United States. The Company believes electronic
components used in these products are readily available from a number of domestic suppliers and from other foreign suppliers.

Aviel connector materials are typically
made of commodity metals and include some application of precious materials, including silver and gold. The Aviel Electronic Division
purchases almost all of its connector materials and products from vendors in Asia and the United States. The Company believes the
connector materials used in the manufacturing of its connector products are readily available from a number of foreign and domestic
suppliers.

Oddcables.com connectors and cable are typically
acquired from the Aviel and Connector and Cable divisions or purchased from other high quality manufacturers and distributors.

Bioconnect cable assembly materials are
typically made of commodity materials such as plastics, rubber, resins and wire. The Company believes materials and components
used in these products are readily available from a number of domestic suppliers and from other foreign suppliers.

RadioMobile purchases its electronic products
from various U.S. and overseas suppliers.

6

The Cables Unlimited Division purchases
all of its products from manufacturers located in the United States. Fiber optic cables are available from various manufacturers
located throughout the United States; however, Cables Unlimited purchases most of its fiber optic cables from Corning Cables Systems
LLC. The Company believes that the raw materials used by Cables Unlimited in its products are readily available and that Cables
Unlimited is not currently dependent on any supplier for its raw materials. Cables Unlimited does not currently have any long-term
purchase or supply agreements with its connector and cable suppliers.

Employees

As of October 31, 2012, the Company employed
178 full-time employees, of whom 57 were in accounting, administration, sales and management, 116 were in manufacturing, distribution
and assembly, and five were engineers engaged in design, engineering and research and development. The employees are based at the
Company’s offices in San Diego, California (113 employees), Las Vegas, Nevada (8 employees), and Yaphank, New York (57 employees).
The Company also occasionally hires part-time employees. The Company believes that it has a good relationship with its employees.
The newly acquired Cables Unlimited Division employs three cable installers who are currently represented by a union. Other than
the foregoing installers that belong to a union, none of the Company’s other employees are unionized.

Research and Development

The Company’s research and development
activities are intended to produce new proprietary products that it can market to the wireless connectivity industry. The Company
expended approximately $470,000 for research and development activities in fiscal year ended October 31, 2012. Research and development
expense during the fiscal year ended October 31, 2011 were approximately $622,000.

In addition to research and development
activities, the Company also invested approximately $1,288,000 during the past two fiscal years in engineering. Engineering
activities consist of the design and development of new products for specific customers, as well as the design and engineering
of new or redesigned products for the industry in general. Engineering work is often carried out in collaboration with
the Company’s customers.

Patents, Trademarks and Licenses

The Company does not own any patents on
any of its products, nor has it registered any product trademarks. Because the Company carries thousands of separate types of connectors
and other products, most of which are available to the Company’s customers from other sources, the Company does not believe
that its business or competitive position is dependent on patent protection. Under its agreement with Corning Cables Systems LLC,
Cables Unlimited is permitted to advertise that it is a Corning Cables System CAH Connections Gold Program member.

Warranties and Terms

The Company warrants its products to be
free from defects in material and workmanship for varying warranty periods, depending upon the product. Products are generally
warranted to the dealer for one year, with the dealer responsible for any additional warranty it may make. Certain Neulink products
are sold directly to end-users and are warranted to those purchasers. The RF Connector products are warranted for the useful life
of the connectors. Although the Company has not experienced any significant warranty claims to date, there can be no assurance
that it will not be subjected to such claims in the future.

The Company usually sells to customers on
30-day terms pursuant to invoices and does not generally grant extended payment terms. Sales to most foreign customers are made
on cash terms at time of shipment. Customers may delay, cancel, reduce, or return products after shipment subject to a restocking
charge.

Under its agreement with Corning Cables
Systems LLC, Cables Unlimited is authorized to manufacture optic cable assemblies that are backed by Corning Cables Systems’
extended warranty (referred to as the “Gold Certified Warranty”).

Because RadioMobile’s customers include
municipalities and other governmental agencies, RadioMobile’s warranties and related agreements depend on the governmental
agencies’ requirements. For example, under its agreement with Los Angeles County, RadioMobile is required to correct all
defects for all service/products it provided and is required to make spare parts available to Los Angeles County for two years
after the equipment is first delivered and installed.

Competition

The Company and industry analysts estimate
that the worldwide sales of interconnect products were approximately $46-$47 billion in 2012. The Company believes that the worldwide
industry for interconnect products and systems is highly fragmented, with no one competitor having over a 15% share of the total market.
Many of the competitors of the Connector and Cable Division have significantly greater financial resources and broader product
lines. The Connector and Cable Division competes on the basis of product quality, product availability, price, service, delivery
time and value-added support to its distributors and OEM customers. Since the Company’s strategy is to provide a broad selection
of products in the areas in which it competes and to have a ready supply of those products available at all times, the Company
normally carries a significant amount of inventory of its connector products.

7

The Bioconnect division competes with numerous
other companies in all areas of its operations, including the manufacture of OEM custom products and medical cable products. Most
of the competitors of Bioconnect are larger and have significantly greater financial resources than Bioconnect.

Aviel Electronics has specialized in microwave
and radio frequency (RF) custom connectors which lowers the number of its direct competitors. Because Aviel Electronics is an approved
vendor of leading aerospace, electronics, OEM and government agencies in the United States and abroad, competition is limited to
those manufacturers who have received formal certification or approval.

Neulink competes with various manufacturers
of wireless communications equipment for the industrial market, include large companies such as Microwave Data Systems (a subsidiary
of General Electric) and Data Radio. Although a number of larger firms could enter Neulink’s markets with similar products,
Neulink’s strategy is focused on serving and providing specific hardware and software combinations with the goal of exploiting
selected “niche” wireless markets and applications. While the Neulink Division’s competitors offer products that
are substantially similar to Neulink’s radio modems, the Neulink Division tries to enhance its competitive position by offering
additional product support services before, during, and after the sale.

Cables Unlimited competes on the basis of
product quality, custom design, service, delivery time and value-added support to its customers. Since Cables Unlimited is a Corning
Cables System CAH Connections Gold Program member, it is one of 14 other companies permitted to manufacture fiber optic cable assemblies
that are backed by Corning Cables Systems’ extended warranty. At present, there are no other companies that manufacture a
product that is similar to the Optiflex hybrid fiber optic cable assemblies for use by wireless service providers.

Government Regulations

The Company’s products are designed
to meet all known existing or proposed governmental regulations. Management believes that the Company currently meets existing
standards for approvals by government regulatory agencies for its principal products. Because the products designed and sold by
the Aviel Electronics Division are used in commercial and military aerospace products, its products are regulated by various government
agencies in the United States and abroad.

Neulink products are subject to the regulations
of the FCC in the United States, the Department of Communications (D.O.C.) in Canada, and the E.C.C. Radio Regulation Division
in Europe. The Company’s present equipment is “type-accepted” for use in the United States and Canada.
Neulink offers products that comply with current FCC, Industry Canada, and some European Union regulations. The system integrator,
or end user, is responsible for compliance with applicable government regulations.

Bioconnect products are subject to the regulations
of the U.S. Food and Drug Administration.

The Company’s products are Restriction
on Hazardous Substances (“RoHS”) compliant.

ITEM 1.A

RISK FACTORS

Investors should carefully consider the
risks described below and all other information in this Form 10-K. The risks and uncertainties described below are not the only
ones facing the Company. Additional risks and uncertainties not presently known to the Company or that it currently deems immaterial
may also impair the Company’s business and operations.

If any of the following risks actually occur,
the Company’s business, financial condition or results of operations could be materially adversely affected. In such case,
the trading price of the Company’s common stock could decline and investors may lose all or part of the money they paid to
buy the Company’s common stock.

The Company Is Highly Dependent Upon The RF Connector
and Cable Assembly and Cables Unlimited Segments, And Any Major Decline In Those Divisions’ Operations Would Negatively Affect
The Company As A Whole.

Of the Company’s four operating segments,
the RF Connector and Cable Assembly segment and the Cables Unlimited segment collectively accounted for approximately 83% and 85%
of the Company’s total sales for the fiscal years ended October 31, 2012 and 2011, respectively. While the Company expects
that the RF Connector and Cable Assembly segment will continue to generate the largest percentage of the Company’s revenues
for the near future, the Cables Unlimited segment has grown significantly in fiscal 2012 with the introduction of its new product,
Optiflex. Accordingly, because these two segments represent such a large portion of the Company’s revenues and profits, an
adverse change in the operations of either of these two segments could materially adversely affect the Company’s business,
operating results and financial condition. Factors that could adversely affect the RF Connector and Cable and the Cables Unlimited
segments are described below.

8

Difficult Conditions In The Global Economy In General
Have Adversely Affected the Company’s Business And Results Of Operations And It Is Uncertain If These Conditions Will Improve
In The Near Future, And They May Worsen.

A prolonged economic downturn, both in the
U.S. and worldwide, could lead to lower sales or reduced sales growth, reduced prices, lower gross margins, and increased bad debt
risks, all of which could adversely affect the Company’s results of operations, financial condition and cash flows. Slowing
economic activity, particularly in the telecommunication and data communication and wireless communications industries that represent
the Company’s largest target market, may adversely impact the demand for the Company’s products. If the current economic
condition continues or deteriorates, the Company’s results could be adversely affected in the future. There could be a number
of other adverse follow-on effects from the credit crisis on the Company’s business, including insolvency of certain key
distributors, key suppliers, contract manufacturers and customers.

The Company Depends On Third-Party Contract Manufacturers
For A Majority Of Its Connector Manufacturing Needs. If They Are Unable To Manufacture A Sufficient Quantity Of High-Quality Products
On A Timely And Cost-Efficient Basis, The Company’s Net Revenue And Profitability Would Be Harmed And Its Reputation May
Suffer.

Substantially all of the Company’s
RF Connector products are manufactured by third-party contract manufacturers. The Company relies on them to procure components
for RF Connectors and in certain cases to design, assemble and test its products on a timely and cost-efficient basis. If the Company’s
contract manufacturers are unable to complete design work on a timely basis, the Company will experience delays in product development
and its ability to compete may be harmed. In addition, because some of the Company’s manufacturers have manufacturing facilities
in Taiwan and China, their ability to provide the Company with adequate supplies of high-quality products on a timely and cost-efficient
basis is subject to a number of additional risks and uncertainties, including political, social and economic instability and factors
that could impact the shipment of supplies. If the Company’s manufacturers are unable to provide it with adequate supplies
of high-quality products on a timely and cost-efficient basis, the Company’s operations would be disrupted and its net revenue
and profitability would suffer. Moreover, if the Company’s third-party contract manufacturers cannot consistently produce
high-quality products that are free of defects, the Company may experience a higher rate of product returns, which would also reduce
its profitability and may harm the Company’s reputation and brand.

The Company does not currently have any
agreements with any of its contract manufacturers, and such manufacturers could stop manufacturing products for the Company at
any time. Although the Company believes that it could locate alternate contract manufacturers if any of its manufacturers terminated
their business, the Company’s operations could be impacted until alternate manufacturers are found.

During fiscal 2012, approximately 50% of
Cables Unlimited’s revenues were generated from sales of its new OptiFlex cable. Currently, all of the Optiflex cables are
bundled by a third-party supplier before the cables are finally completed by Cables Unlimited. Cables Unlimited relies on this
third party manufacturer to procure components for and assemble the Optiflex bundled cable on a timely and cost-efficient basis.
If this supplier is unable to complete the procurement and assembly on a timely basis, Cables Unlimited will not be able to deliver
its OptiFlex cable in time to meet customer deadlines, or at all. In addition, the fiber optic cable utilized in the bundled Optiflex
is obtained from a single source. If Cables Unlimited and its third party manufacturing partner are unable to obtain adequate supplies
of fiber optic products on a timely and cost-efficient basis, Cables Unlimited’s sales of OptiFlex cables would be disrupted
and its net revenue and profitability would be materially impacted.

The Company’s Dependence On Third-Party Manufacturers
Increases The Risk That It Will Not Have An Adequate Supply Of Products Or That Its Product Costs Will Be Higher Than Expected.

The risks associated with the Company’s
dependence upon third parties which develop and manufacture and assemble the Company’s products, include:

·

reduced control over delivery schedules and quality;

·

risks of inadequate manufacturing yields and excessive costs;

·

the potential lack of adequate capacity during periods of excess demand;
and

·

potential increases in prices due to raw material and/or labor costs.

These risks may lead to increased costs
or delay product delivery, which would harm the Company’s profitability and customer relationships.

9

If The Manufacturers of the Company’s Coaxial Connectors
Or Other Products Discontinue The Manufacturing Processes Needed To Meet The Company’s Demands Or Fail To Upgrade Their Technologies,
the Company May Face Production Delays.

The Company’s coaxial connector and
other product requirements typically represent a small portion of the total production of the third-party manufacturers. As a result,
the Company is subject to the risk that a third party manufacturer will cease production of some of the Company’s products
or fail to continue to advance the process design technologies on which the manufacturing of the Company’s products are based.
Each of these events could increase the Company’s costs, harm its ability to deliver products on time, or develop new products.

The Company’s Dependence Upon Independent Distributors
To Sell And Market The Company’s Products Exposes The Company To The Risk That Such Distributors May Decrease Their Sales
Of The Company’s Products Or Terminate Their Relationship With The Company.

The Company’s sales efforts are primarily
affected through independent distributors. Sales through independent distributors accounted for approximately 52% of the net
sales of the Company for the fiscal year ended October 31, 2012. Although the Company has entered into written agreements with
most of the distributors, the agreements are nonexclusive and generally may be terminated by either party upon 30-60 days’
written notice. The Company’s distributors are not within the control of the Company, are not obligated to purchase products
from the Company, and may also sell other lines of products. There can be no assurance that these distributors will continue their
current relationships with the Company or that they will not give higher priority to the sale of other products, which could include
products of competitors. A reduction in sales efforts or discontinuance of sales of the Company’s products by its distributors
would lead to reduced sales and could materially adversely affect the Company’s financial condition, results of operations
and business. Selling through indirect channels such as distributors may limit the Company’s contact with its ultimate customers
and the Company’s ability to assure customer satisfaction.

A Portion Of The Company’s Sales Is Dependent Upon
A Few Principal Customers, The Loss Of Whom Could Materially Negatively Affect The Company’s Total Sales.

One customer accounted for approximately
33% of the total sales of the Company for the fiscal year ended October 31, 2012. Although this customer has been an on-going
major customer of the Company for at least the past 10 years and the Company has entered into a written distributor agreement with
this customer, this customer does not have any minimum purchase obligations and could stop buying the Company’s products
at any time. A reduction, delay or cancellation of orders from this customer or the loss of this customer could significantly reduce
the Company’s revenues and profits. The Company cannot provide assurance that this customer or any of its current customers
will continue to place orders, that orders by existing customers will continue at current or historical levels or that the Company
will be able to obtain orders from new customers.

Certain of The Company’s Markets Are Subject To
Rapid Technological Change, So the Company’s Success In These Markets Depends On Its Ability To Develop And Introduce New
Products.

Although most of the Company’s products
have a stable market and are only gradually phased out, the Company’s principal markets, the wireless digital transmission
markets, are characterized by:

·

rapidly changing technologies;

·

evolving and competing industry standards;

·

short product life cycles;

·

changing customer needs;

·

emerging competition;

·

frequent new product introductions and enhancements; and

·

rapid product obsolescence.

To develop new products for the connector
and wireless digital transmission markets, the Company must develop, gain access to and use new technologies in a cost-effective
and timely manner. In addition, the Company must maintain close working relationship with key customers in order to develop new
products that meet customers’ changing needs. The Company also must respond to changing industry standards and technological
changes on a timely and cost-effective basis.

Products for connector applications are
based on industry standards that are continually evolving. The Company’s ability to compete in the future will depend on
its ability to identify and ensure compliance with these evolving industry standards. If the Company is not successful in developing
or using new technologies or in developing new products or product enhancements, its future revenues may be materially affected.
The Company’s attempt to keep up with technological advances may require substantial time and expense.

10

Because The Markets In Which The Company Competes Are
Highly Competitive, A Failure To Effectively Compete Could Result In An Immediate And Substantial Loss Of Market Share.

The markets in which the Company operates
are highly competitive and the Company expects that competition will increase in these markets. In particular, the connector and
communications markets in which the Company’s products are sold are intensely competitive. A failure to effectively compete
in this market could result in an immediate and substantial loss of revenues and market share. Because most of the Company’s
sales are derived from products that are not proprietary or that can be used to distinguish the Company from its competitors, the
Company’s ability to compete successfully in these markets depends on a number of factors, including:

·

product quality;

·

reliability;

·

customer support;

·

time-to-market;

·

price;

·

market acceptance of competitors’ products; and

·

general economic conditions.

The Company’s revenues may suffer
if the Company is not able to effectively satisfy its customers in each of the foregoing ways. In addition, the Company’s
competitors or customers may offer enhancements to its existing products or offer new products based on new technologies, industry
standards or customer requirements that have the potential to replace or provide lower-cost or higher performance alternatives
to the Company’s products. The introduction of enhancements or new products by the Company’s competitors could render
its existing and future products obsolete or unmarketable.

Many of the Company’s competitors
have significantly greater financial and other resources. In certain circumstances, the Company’s customers or potential
customers have internal manufacturing capabilities with which the Company may compete.

If The Industries Into Which The Company Sells Its Products
Experience Recession Or Other Cyclical Effects Impacting The Budgets Of Its Customers, The Company’s Operating Results Could
Be Negatively Impacted.

The primary customers for the Company’s
connector and cable products are in the wireless communications industries. Any significant downturn in the Company’s customers’
markets, in particular, or in general economic conditions which result in the cut back of budgets would likely result in a reduction
in demand for the Company’s products and services and could harm the Company’s business. Historically, the communications
industry has been cyclical, affected by both economic conditions and industry-specific cycles. Depressed general economic conditions
and cyclical downturns in the communications industry have each had an adverse effect on sales of communications equipment, OEMs
and their suppliers, including the Company. No assurance can be given that the wireless communications industry will not experience
a material downturn in the near future. Any cyclical downturn in the communications industry could have a material adverse effect
on the Company.

Because The Company Sells Its Products To Foreign Customers,
The Company Is Exposed To All Of The Risks Associated With International Sales, Including Foreign Currency Exposure.

Sales to customers located outside the United
States, either directly or through U.S. and foreign distributors, accounted for approximately 5% and 11% of the net sales of the
Company during the years ended October 31, 2012 and 2011, respectively. International revenues are subject to a number of risks,
including:

·

longer accounts receivable payment cycles;

·

difficulty in enforcing agreements and in collecting accounts receivable;

·

tariffs and other restrictions on foreign trade;

·

economic and political instability; and the

·

burdens of complying with a wide variety of foreign laws.

11

The Company’s foreign sales are also
affected by general economic conditions in its international markets. A prolonged economic downturn in its foreign markets could
have a material adverse effect on the Company’s business. There can be no assurance that the factors described above will
not have an adverse material effect on the Company’s future international revenues and, consequently, on the financial condition,
results of operations and business of the Company.

Since sales made to foreign customers or
foreign distributors have historically been in U.S. dollars, the Company has not been exposed to the risks of foreign currency
fluctuations. However, if the Company in the future is required to accept sales denominated in the currencies of the countries
where sales are made, the Company will thereafter also be exposed to currency fluctuation risks.

The Loss Of Key Personnel Could Adversely Affect The Company’s
Operations.

The Company’s success will depend
to a significant extent on the continued service of the Company’s senior executives including Howard Hill, its Chief Executive
Officer, and certain other key employees, including certain technical and marketing personnel. The Company’s employment agreement
with Mr. Hill expires by its terms on July 31, 2013. No assurance can be given that Mr. Hill will continue to be employed by this
Company after the expiration of his employment agreement. If the Company lost the services of Mr. Hill or one or more
of the Company’s key executives or employees (including if one or more of the Company’s officers or employees decided
to join a competitor or otherwise compete directly or indirectly with the Company), this could materially adversely affect the
Company’s business, operating results, and financial condition.

The Company May Make Future Acquisitions, Which Will Involve
Numerous Risks.

Since August 2004, the Company has purchased
the operations of four smaller businesses (it purchased Aviel Electronics in Las Vegas, Nevada, in August 2004, Oddcables.com in
San Diego, California, in September 2005, RadioMobile, Inc. in San Diego, California, in September 2007, and Cables Unlimited in
Long Island, New York, in June 2011). The Company regularly considers potential acquisitions of other companies that could expand
the Company’s product line or customer base and may in the future make additional acquisitions. Accordingly, the Company
will be subject to numerous risks associated with the acquisition of additional companies, including:

·

diversion of management’s attention;

·

the effect on the Company’s financial statements of the amortization of acquired intangible assets;

·

the cost associated with acquisitions and the integration of acquired operations;

·

the Company may not be able to secure capital to finance future acquisitions to the extent additional debt or equity is needed; and

·

assumption of unknown liabilities, or other unanticipated events or circumstances.

Any of these risks could materially harm
the Company’s business, financial condition and results of operations. There can be no assurance that any business that the
Company acquires will achieve anticipated revenues or operating results.

The Company Has No Patent Rights In The Technology Employed
In Its Products, Which May Limit the Company’s Ability To Compete.

The Company does not hold any United States
or foreign patents and does not have any patents pending. The Company does not seek to protect its rights in the technology that
it develops or that the Company’s third-party contract manufacturers develop by means of the patent laws, although it does
protect some aspects of its proprietary products and technologies by means of copyright and trade secret laws. Accordingly, competitors
can and do sell many of the same products as the Company, and the Company cannot prevent or restrict such competition.

Volatility of Trading Prices Of The Company’s Stock
Could Result In A Loss On An Investment In The Company’s Stock.

In the past several years the market price
of the Company’s common stock has varied greatly, and the volume of the Company’s common stock traded has fluctuated
greatly as well. These fluctuations often occur independently of the Company’s performance or any announcements by the Company.
Factors that may result in such fluctuations include:

·

any shortfall in revenues or net income from revenues or net income expected by securities analysts

·

fluctuations in the Company’s financial results or the results of other connector and communications-related companies, including those of the Company’s direct competitors

·

changes in analysts’ estimates of the Company’s financial performance, the financial performance of the Company’s competitors, or the financial performance of connector and communications-related public companies in general

·

general conditions in the connector and communications industries

12

·

changes in the Company’s revenue growth rates or the growth rates of the Company’s competitors

·

sales of large blocks of the Company’s common stock

·

conditions in the financial markets in general

In addition, the stock market may from time
to time experience extreme price and volume fluctuations, which may be unrelated to the operating performance of any specific company.
Accordingly, the market prices of the Company’s common stock may be expected to experience significant fluctuations in the
future.

Businesses have become increasingly dependent
on digital technologies to conduct day-to-day operations. At the same time, cyber incidents, including deliberate attacks or unintentional
events, have increased. A cyber attack could include gaining unauthorized access to digital systems for purposes of misappropriating
assets or sensitive information, corrupting data, or causing operational disruption or result in denial of service on websites.

We depend on digital technology,
including information systems and related infrastructure, to process and record financial and operating data, and communicate
with our employees and business partners.

Our technologies, systems, networks, and
those of our business partners may become the target of cyber attacks or information security breaches that could result in the
unauthorized release, gathering, monitoring, misuse, loss or destruction of proprietary and other information, or other disruption
of our business operations.

Although to date we have not experienced
any losses relating to cyber attacks, there can be no assurance that we will not suffer such losses in the future. As cyber threats
continue to evolve, we may be required to expend significant additional resources to continue to modify or enhance our protective
measures or to investigate and remediate any information security vulnerabilities.

ITEM 1B.

UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 2.

DESCRIPTION OF PROPERTY

The Company leases its corporate headquarters
building at 7610 Miramar Road, Building 6000, San Diego, California. The building consists of approximately 22,000 square feet
which houses its corporate administration, sales and marketing, and engineering plus production and warehousing for the Company’s
Connector and Cable Assembly and Bioconnect Divisions. The lease for this facility expires on March 31, 2014. In addition to the
foregoing building, the Company also leases the following facilities:

(i)

The cable assembly manufacturing portion of the Connector and Cable Assembly Division operates in a separate 3,180 square foot facility that is located adjacent to the Company’s corporate headquarters. The lease for this space expires on March 31, 2014.

(ii)

The Neulink and RadioMobile Divisions operate from a separate building that is located near the Company’s corporate headquarters at 7606 Miramar Road, Building 7200. The building consists of approximately 2,500 square feet of administrative and manufacturing space and houses the production and sales staff of the Neulink and RadioMobile divisions. The lease for this space expires on March 31, 2014.

(iii)

During fiscal 2009, Aviel entered into a facility lease agreement for approximately 4,500 square feet at 3060 Post Road, Suite 100 Las Vegas Nevada. The lease term commenced September 1, 2009 and will expire March 31, 2015.

(iv)

The Oddcables.com Division leases an approximately 4,000 square
foot facility located at 7642 Clairemont Mesa Boulevard Suite 211, San Diego, California. The lease for this space expires December
31, 2013.

(v)

The Cables Unlimited Division leases an approximately 12,000
square foot facility located at 3 Old Dock Road, Yaphank, New York. The lease for this space expires June 30, 2016. However, Cables
Unlimited has a one time option to extend the term of the lease for an additional five (5) year term. Cables Unlimited’s
monthly rent expense under the lease is $13,000 per month, plus payments of all utilities, janitorial expenses, routine maintenance
costs, and costs of insurance for Cables Unlimited’s business operations and equipment. The landlord is a company controlled
by Darren Clark, the former owner of Cables Unlimited and a current director of the Company. In addition to the foregoing facilities,
in October 2012 Cables Unlimited leased an additional approximately 2,000 square foot facility in Yaphank from a third party under
a one-year lease. This additional space is used by Cables Unlimited as additional warehouse space and for pre-manufacturing activities.
The month rent payable for this additional space is $1,250.

13

The aggregate monthly rental for all of
the Company’s facilities was approximately $45,306 per month, plus utilities, maintenance and insurance as of October 31,
2012.

The Company currently believes that its
facilities are sufficient to meet its foreseeable needs. However, should the Company require additional space; the Company believes
that suitable additional space is available near the Company’s current facilities. In addition, the Company believes that
it will be able to renew its existing leases upon the expiration of the current leases or, if desirable or necessary, relocate
to alternate facilities on substantially similar terms.

ITEM 3.

LEGAL PROCEEDINGS

From time to time, the Company is involved in legal proceedings that are related to its business and operations.
The Company is not currently a party to any legal proceedings. However, on January 18, 2013, the Company received a letter
from an attorney who represents a former employee. The former employee was terminated in November 2012. The letter
states that, based upon a preliminary investigation, the former employee’s attorney has concluded that the terminated employee
can bring claims against the Company for wrongful termination. The attorney has demanded that the Company pay the terminated
employee $725,000 for a general release of liability. The Company disputes the wrongful termination claim and has notified
its employment practices liability insurance carrier of the demand.

The Company’s Common Stock is listed
and trades on the NASDAQ Global Market under the symbol “RFIL.”

For the periods indicated, the following
tables set forth the high and low closing prices per share of Common Stock. These prices represent inter-dealer quotations without
retail mark-up, markdown or commission and may not necessarily represent actual transactions.

Quarter

High

Low

Fiscal 2012

November 1, 2011 - January 31, 2012

$

3.82

$

3.05

February 1, 2012 - April 30, 2012

3.92

3.27

May 1, 2012 - July 31, 2012

4.15

3.31

August 1, 2012 - October 31, 2012

4.49

3.91

Fiscal 2011

November 1, 2010 - January 31, 2011

$

3.65

$

3.00

February 1, 2011 - April 30, 2011

4.39

3.63

May 1, 2011 - July 31, 2011

4.48

3.50

August 1, 2011 - October 31, 2011

4.46

2.99

Stockholders. As of October
31, 2012 there were 372 holders of the Company’s Common Stock according to the records of the Company’s transfer agent,
Continental Stock Transfer & Trust Company, New York, New York, not including holders who hold their stock in “street
name.”

Dividends. The Company paid a total
of $1,386,751 of dividends during the fiscal year ended October 31, 2012. The dividends consisted of four quarterly dividend payments
of $0.05 per share. The Board of Directors may continue to declare and pay dividends in the future depending on the Company’s
financial condition and its financial needs.

14

Repurchase of Securities. The Company
did not repurchase any shares of its common stock during the fourth quarter of the fiscal year ended October 31, 2012.

Recent Sales of Unregistered Securities. There
were no previously unreported sales of equity securities by the Company that were not registered under the Securities Act during
fiscal 2012.

EQUITY COMPENSATION PLAN INFORMATION

The following table provides information
as of October 31, 2012 with respect to the shares of Company common stock that may be issued under the Company’s existing
equity compensation plans.

A

B

C

Number of Securities

Remaining Available for

Future Issuance Under

Equity Compensation

Number of Securities to

Weighted Average

Plans (Excluding

be Issued Upon Exercise

Exercise Price of

Securities Reflected in

Plan Category

of Outstanding Options

Outstanding Options ($)

Column A)

Equity Compensation Plans Approved by Stockholders (1)

1,157,057

$

3.22

525,768

Equity Compensation Plans Not Approved by Stockholders (2)

847,724

$

0.93

0

Total

2,004,781

$

2.25

525,768

(1)

Consists of options granted under the R.F. Industries, Ltd. (i) 2010 Stock Option Plan and (ii) 2000 Stock Option. The 2000 Stock Option Plan has expired, and no additional options can be granted under this plan. Accordingly, all 525,768 shares remaining available for issuance represent shares under the 2010 Stock Option Plan.

(2)

Consists of options granted to six officers and/or key employees of the Company under employment agreements entered into by the Company with each of these officers and employees.

ITEM 6. SELECTED FINANCIAL DATA

Not applicable to a “smaller reporting
company” as defined in Item 10(f)(1) of SEC Regulation S-K.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our financial statements have been prepared
in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements
requires us to make significant estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses
and related disclosure of contingent assets and liabilities. We evaluate our estimates, including those related to bad debts, inventory
reserves and contingencies on an ongoing basis. We base our estimates on historical experience and on various other assumptions
that are believed to be appropriate under the circumstances, the results of which form the basis for making judgments about the
carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions.

One of the accounting policies that involves
significant judgments and estimates concerns our inventory valuation. Inventories are valued at the weighted average cost value.
Certain items in the inventory may be considered obsolete or excess and, as such, we establish an allowance to reduce the carrying
value of these items to their net realizable value. Based on estimates, assumptions and judgments made from the information available
at the time, we determine the amounts of these allowances. Because inventories have, during the past few years, represented up
to one-third of our total assets, any reduction in the value of our inventories would require us to take write-offs that would
affect our net worth and future earnings.

Another accounting policy that involves
significant judgments and estimates is our accounts receivable allowance valuation. The Company routinely assesses the financial
strength of its customers and maintains an allowance for doubtful accounts that management believes will adequately provide for
credit losses.

Another critical accounting policy that
involves significant judgments and estimates is management’s assessment of non-amortizable intangible assets for impairments.
We review our non-amortizable intangible asset for impairment annually in the fourth quarter at the reporting unit level. We also
analyze each quarter whether any indicators of impairment exist.

15

Another critical accounting policy that
involves significant judgments and estimates is management’s assessment of goodwill for impairments. We review our goodwill
for impairment annually in the fourth quarter at the reporting unit level. We also analyze each quarter whether any indicators
of impairment exist.

The Company uses the Black-Scholes model
to value the stock option grants which involves significant judgments and estimates.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

For recently issued accounting pronouncements
that may affect us, see Note 1 of Notes to Consolidated Financial Statements.

OVERVIEW

The Company markets connectors and cables
to numerous industries for use in thousands of products, primarily for the wireless market. The Company aggregates operating divisions
into operating segments which have similar economic characteristics and divisions are similar in the majority of the following
areas: (1) the nature of the product and services; (2) the nature of the production process; (3) the type or class of customer
for their products and services; (4) the methods used to distribute their products or services; (5) if applicable, the nature of
the regulatory environment. The Company has four segments - the “RF Connector and Cable Assembly” segment; the “Medical
Cabling and Interconnector” segment; the “Cables Unlimited” segment; and the “RF Wireless” segment-based
upon this evaluation.

The RF Connector and Cable Assembly segment
is comprised of three divisions; the Medical Cabling and Interconnector segment is comprised of one division, the Cables Unlimited
segment is comprised of one division, while the RF Wireless segment is comprised of two divisions. The four divisions that meet
the quantitative thresholds for segment reporting are Connector and Cable Assembly, Bioconnect, Cables Unlimited, and RF Neulink.
Each of the other divisions aggregated into these segments that have similar products that are marketed to their respective customer
base; production and product development processes are similar in nature. The specific customers are different for each division;
however, there is some overlapping of product sales to them. The methods used to distribute products are similar within each division
aggregated.

Management identifies the Company’s
segments based on strategic business units that are, in turn, based along market lines. These strategic business units offer products
and services to different markets in accordance with their customer base and product usage. For segment reporting purposes, the
Company aggregates the Connector and Cable Assembly, Aviel Electronics and Oddcables.com divisions into the RF Connector Cable
Assembly segment, and the RF Neulink and RadioMobile divisions into the RF Wireless segment. The Bioconnect division makes up the
Company’s Medical Cabling and Interconnector segment, while the Cables Unlimited division is the Cables Unlimited segment.

Historically, most of the Company’s
revenues were generated from the sale of RF connector products and connector cable assemblies (the Connector and Cable Assembly
division accounted for approximately 47% of the Company’s total sales for the fiscal year ended October 31, 2012, and 71%
of net sales for the prior fiscal year). While the Company expects that the RF Connector and Cable Assembly segment will continue
to generate most of the Company’s revenues for the near future, the Cables Unlimited segment has grown significantly as a
result of the introduction of the new OptiFlex cabling product by that division (sales at Cables Unlimited represented 36% of total
sales for the year ended October 31, 2012). Because the gross margins at the RF Connector and Cable Assembly segment are higher
than those at the Cables Unlimited segment, the proportionate increase in sales by Cables Unlimited is expected to reduce the Company’s
overall gross margins in the future.

The net income in fiscal 2012 represented
the 19th consecutive year that the Company has been profitable.

On
June 15, 2011 the Company acquired 100% of the outstanding capital stock of Cables Unlimited, Inc., through the merger of CUI Acquisitions,
Inc., a newly formed New York corporation and wholly-owned subsidiary of the Company, and Cables Unlimited. The Company paid $5,600,000
for Cables Unlimited. The purchase price was paid one-half in cash and one-half in shares of unregistered common stock of the Company.
At the closing on June 15, 2011, the Company issued to the owner of Cables Unlimited 762,738 shares of the Company’s common
stock (the number of shares is equal to $2,800,000 divided by the volume weighted average price of the Company’s common stock
for the five trading days prior to the date on which the transaction was first publicly disclosed), and $2,800,000 in cash ($2,550,000
of which was paid to seller at the closing, and $250,000 was paid in June 2012). The results of Cables Unlimited operations
after June 15, 2011 have been included in the Company’s consolidated results of operations.

16

Financial Condition

The following table presents certain key
measures of financial condition as of October 31, 2012 and 2011:

2012

2011

Amount

% Total Assets

Amount

% Total Assets

Cash and cash equivalents and certificates of deposit

$5,491,768

21.6

%

$5,855,540

24.0

%

Current assets

19,044,246

74.8

%

16,413,206

67.3

%

Current liabilities

4,140,476

16.3

%

3,494,849

14.3

%

Working capital

14,903,770

58.5

%

12,918,357

53.0

%

Property and equipment – net

1,204,298

4.7

%

2,442,738

10.0

%

Total assets

25,463,418

100.0

%

24,377,946

100.0

%

Stockholders’ equity

20,230,305

79.4

%

19,678,028

80.7

%

Liquidity and Capital Resources

Management believes that its existing current
assets and the amount of cash it anticipates it will generate from current operations will be sufficient to fund the anticipated
liquidity and capital resource needs of the Company for the fiscal year ending October 31, 2013 (“fiscal 2013”). The
Company does not, however, currently have any commercial banking arrangements providing for loans or credit facilities should the
Company need to obtain additional capital. Management believes that its existing assets and the cash it expects to generate from
operations will be sufficient during the current fiscal year based on the following:

·

As of October 31, 2012, the amount of cash and cash equivalents and short-term certificates of deposit was equal to $5,491,768 in the aggregate. Accordingly, the Company believes that it has sufficient cash available to operate its current business and fund its anticipated capital expenditures for the upcoming year.

·

As of October 31, 2012, the Company had $19,044,246 in current assets and $4,140,476 in current liabilities.

Management believes that based on the Company’s
financial condition at October 31, 2012, and its recent operating results, there are sufficient capital resources to fund its operations
and future acquisitions for at least the next 12 months. Should the Company need to obtain additional funds for unexpected capital
improvements or other expansion activities, based on its balance sheet and its history of profitability, the Company believes that
it would be able to obtain bank loans to finance these expenditures. However, there can be no assurance any bank loan would be
obtainable, or if obtained, would be on favorable terms or conditions.

The Company is not a party to off-balance
sheet arrangements and does not engage in trading activities involving non-exchange traded contracts. In addition, the Company
has no financial guarantees or lease agreements or other arrangements that could trigger a requirement for an early payment or
that could impact the value of the Company’s assets. Cables Unlimited, the subsidiary that the Company purchased in June
2011, was the guarantor of a second mortgage on the Cables Unlimited property in New York. Cables Unlimited was released as guarantor
on the second mortgage, which was refinanced in January 2012. As a result, the Company deconsolidated the operations of its variable
interest entity as of January 2012.

As part of its business strategy, and because
of its offshore manufacturing arrangements, the Company normally maintains a significant level of inventory. As described elsewhere
in this Annual Report, one of the Company’s competitive advantages and strategies is to maintain customer satisfaction by
having sufficient inventory on hand to fulfill most customer orders on short notice. Accordingly, the Company maintains a significant
amount of inventory, which increases or decreases to reflect the Company’s sales and lead times for products. Due to a 56%
increase in sales, attributable primarily to the acquisition of Cables Unlimited, in fiscal 2012 compared to sales of the prior
year, the Company’s year-end inventory balance increased by 13% compared to prior year’s year-end inventory balance.
The Company continuously monitors its inventory levels and product costs. For inventory purchase pricing purposes, the
Company may, however, increase its inventory levels from time to time to protect against anticipated future increases in raw material
costs or to obtain volume discounts.

Net cash provided by operating activities
for the year ended October 31, 2012 was $2,334,943. The Company’s net cash from operations was less than its net income of
$2,612,422 due primarily to $794,945 of cash that was used by the Company to purchase additional inventory. The large outlay of
cash to purchase inventory was primarily offset by $863,759 of non-cash expenses ($599,824 of depreciation and amortization, and
$263,935 of stock compensation expense). Accounts receivable increased by $2,584,752 due to a significant increase in sales, as
did the Company’s income tax payable and its accounts payable (which increased primarily due to inventory purchased in the
fourth quarter). In fiscal year ended October 31, 2011, net cash provided by operating activities was $122,844.

During fiscal 2012, net cash provided by
investing activities was $3,504,624, which represents the difference between the proceeds the Company received from the maturity
of certain of its certificates of deposit ($4,094,724) and $590,100 that the Company invested in additional capital equipment (primarily
for the Connector and Cable, Cables Unlimited, Aviel, and Bioconnect divisions). During fiscal 2011, net cash used in investing
activities was $1,738,868.

Net cash used in financing activities in
fiscal 2012 was $2,108,615 due primarily to (i) dividends paid of $1,386,751, and (ii) $1,143,243 used to repurchase 324,871 shares
of Company common stock. These cash outlays were partially offset by the receipt of $353,791 from the exercise of stock options
and $87,088 of excess tax benefits. In fiscal 2011, financing activities decreased the Company’s net cash by $1,352,044.

The Company does not believe that inflation
has had a material impact on its business or operations.

17

Results of Operations

The following summarizes the key components
of the results of operations for the fiscal years ended October 31, 2012 and 2011:

2012

2011

% of Net

% of Net

Amount

Sales

Amount

Sales

Net sales

$

30,232,653

100

%

$

19,433,503

100

%

Cost of sales

16,998,833

56

%

10,097,130

52

%

Gross profit

13,233,820

44

%

9,336,373

48

%

Engineering expenses

1,134,095

4

%

1,246,758

6

%

Selling and general expenses

8,024,485

27

%

6,953,510

36

%

Operating income

4,075,240

14

%

1,136,105

6

%

Other income/expense, net

37,669

0

%

15,738

0

%

Income before income taxes

4,112,909

14

%

1,151,843

6

%

Income taxes

1,500,487

5

%

378,832

2

%

Net income

2,612,422

9

%

773,011

4

%

Net sales of the Company increased by $10,799,150,
or 56%, for the fiscal year ended October 31, 2012 (“fiscal 2012”) compared to the fiscal year ended October 31, 2011
(“fiscal 2011”). Net sales increased in fiscal 2012 due primarily to the acquisition of Cables Unlimited in June 2011.
During fiscal 2012, Cables Unlimited contributed net sales of $10,912,717 to the Company’s total net sales, compared to $2,643,552
that Cables Unlimited contributed during the four and a half month period between the date of its acquisition (June 15, 2011) and
the end of the fiscal year 2011 (October 31, 2011). The increase in net sales in fiscal 2012 also is attributable to net sales
increases in all of the Company’s other three business segments. Net sales increased at the Medical Cabling and Interconnector
increased by $444,744 while net sales at the RF Wireless segment increased by $1,776,937. Net sales at the Connector and Cable
Assembly segment increased in fiscal 2012 from fiscal 2011 by $308,304. The increase in net sales at the Connector and Cable Assembly
segment was primarily due to an increase in sales to the Company’s primary distributors, which reflected an increase in the
wireless industry in general. Net sales at the Medical Cabling and Interconnector segment was primarily due to an increase in sales
to its main customers, which increase is partially due to the introduction of new medical cabling products by the Medical Cabling
segment. The RF Wireless segment experienced an increase in sales of $1,776,937 compared to sales in fiscal 2011. The increase
in the RF Wireless segment was due entirely to increased sales by the RadioMobile. Net sales in the RF Wireless division increased
significantly in fiscal 2012 as a result of shipments made under the $2.6 million contract that RadioMobile received from the Los
Angeles County Fire Department in November 2011 for the implementation of a wireless system upgrade to the County Fire Department's
existing remote communications equipment. The Company recognized approximately $1.6 million of the $2.6 million contract in fiscal
2012; the remaining balance of the Los Angeles County contract is expected to be realized during the first quarter of calendar
2013.

The Company’s gross profit increased
by $3,897,447 or by 42% to $13,233,820 in 2012 from $9,336,373 in 2011 due to the increase in net sales. However, as a percentage
of net sales, gross profit decreased slightly to 44% in fiscal 2012, from 48% in fiscal 2011, due to the lower margins of the Cables
Unlimited segment.

Engineering expenses, which include research
and development expenses, incurred at the Company’s four segments and relating to the design, re-design or development of
products for specific customers decreased from the prior year by $112,663 to $1,134,095 compared to $1,246,758 in fiscal 2011.
As a percentage of net sales, engineering expenses decreased to 4% in fiscal 2012 from 6% in fiscal 2011. Engineering expense (including
research and development) during fiscal 2012 related to development of new products at the Connector and Cable, RF Wireless, Medical
Cabling and Interconnector, and Cables Unlimited segments. The Company collectively incurred approximately $470,000 of research
and development expenses in fiscal 2012 in the development of new products compared to $622,000 of research and development expenses
in fiscal 2011. Research and development expenses decreased 24%, or $152,000 compared with prior year’s expense due primarily
to certain projects completions at the RF Wireless division such as the LA County Fire agreement.

Selling and general expenses increased by
$1,070,975 or 15%, to $8,024,485 during fiscal 2012 from $6,953,510 in fiscal 2011. This increase is primarily related to the increase
in the Company’s overall operations and expenses incurred by the Cables Unlimited division for the full fiscal year compared
to the four and a half month period between the date of its acquisition (June 15, 2011) and the end of the fiscal year 2011. Since
sales increased by a higher percentage than the increase in selling and general expenses, as a percentage of sales, selling and
general expenses decreased to 27% from 36% in fiscal 2011. In addition, stock based compensation
expense decreased by $48,376 to $263,935 in fiscal 2012 from $312,311 in fiscal 2011. Sales commission expense increased by $13,000
to $137,000 in fiscal 2012 from $124,000 in fiscal 2011 due to the increases in direct sales at certain of the Company’s
divisions. Accounting and legal fees decreased significantly to $494,000 in fiscal 2012 from $976,000 in fiscal 2011. Accounting
and legal fees were unusually high in fiscal 2011 due primarily to expenses related to the acquisition of Cables Unlimited and
to shareholder and proxy issues.

18

The increase in net
sales and the resulting increase in gross profits were partially offset by the increase in selling and general expenses. Nevertheless,
operating income for fiscal 2012 increased by $2,939,135, or 259%, to $4,075,240 from $1,136,105 in fiscal 2011. As a result of
net interest income received in both fiscal 2012 and 2011, income before taxes in fiscal 2012 increased by 257% or by $2,961,066
to $4,112,909 compared to income before taxes of $1,151,843 in fiscal 2011. Net income for fiscal 2012 increased by $1,839,411,
or 238%, to $2,612,422 compared to $773,011 in fiscal year ended October 31, 2011. The effective tax rate in fiscal 2012 increased
to 36.5% compared to 32.9% in fiscal 2011 due primarily to the expiration of the research and development tax credit on December
31, 2011 and an update to the state tax rate based upon the tax returns filed for the year ended October 31, 2011. The Company
recognized approximately $79,000 of tax benefit for uncertain tax positions where the statute of limitations expired during the
quarter ended July 31, 2012.

ITEM 7A.

QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable to a “smaller reporting
company” as defined in Item 10(f)(1) of SEC Regulation S-K.

ITEM 8.

STATEMENTS AND SUPPLEMENTARY DATA

The following Financial Statements of the
Company with related Notes and Report of Independent Registered Public Accounting Firm are attached hereto as pages F-1 to F-20
and filed as part of this Annual Report:

Consolidated Statements of Income for the years ended October 31,
2012 and 2011

·

Consolidated Statements of Equity for the years ended October 31,
2012 and 2011

·

Consolidated Statements of Cash Flows for the years ended October
31, 2012 and 2011

·

Notes to Consolidated Financial Statements

ITEM 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE

None

ITEM 9A.

CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures
(as defined in Exchange Act Rule 13a-15(e)) that are designed to assure that information required to be disclosed in our Exchange
Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s
rules and forms, and that such information is accumulated and communicated to management, including the Chief Executive Officer
and President and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.

In designing and evaluating the disclosure
controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can
provide reasonable assurance only of achieving the desired control objectives, and management necessarily is required to apply
its judgment in weighting the costs and benefits of possible new or different controls and procedures. Limitations are inherent
in all control systems, so no evaluation of controls can provide absolute assurance that all control issues and any fraud have
been detected.

As required by Exchange Act Rule 13a-15(b),
as of the end of the period covered by this report, management, under the supervision and with the participation of our Chief Executive
Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures. Based on this evaluation,
management concluded that our disclosure controls and procedures were effective as of that date.

Management’s Report on Internal Control over Financial
Reporting

Our management is responsible for establishing
and maintaining adequate internal control over financial reporting, and for performing an assessment of the effectiveness of internal
control over financial reporting as of October 31, 2012. Internal control over financial reporting is a process designed
to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with accounting principles generally accepted in the United States of America.

19

Our system of internal control over financial
reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately
and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded
as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that
our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (iii)
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company's
assets that could have a material effect on the financial statements.

Under the supervision and with the participation
of our management, including our Chief Executive Officer, and President and Chief Financial Officer, we have conducted an evaluation
of the effectiveness of our internal control over financial reporting based on the framework in “Internal Control—Integrated
Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on the above evaluation, our management
has concluded that the system of internal controls over financial reporting was effective as of October 31, 2012.

This annual report does not include an attestation
report of the Company’s independent registered public accounting firm regarding internal control over financial reporting.
Management’s report was not subject to attestation by the Company’s independent registered public accounting firm pursuant
to permanent rules of the Securities and Exchange Commission that permit the Company to provide only management’s report
in this annual report.

Changes in Internal Controls

There was no change in the Company’s
internal control over financial reporting during the most recent fiscal quarter ended October 31, 2012 that materially affected,
or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART III

ITEM 10.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Set forth below is information regarding
the Company’s directors, including information furnished by them as to their principal occupations for the last five years,
and their ages as of October 31, 2012. A majority of the Directors are “independent directors” as defined by the listing
standards of the Nasdaq Stock Market, and the Board of Directors has determined that such independent directors have no relationship
with the Company that would interfere with the exercise of their independent judgment in carrying out the responsibilities of a
director. The independent Directors are Messrs. Fink, Reynolds, Sandberg, and Waterfield.

Name

Age

Director Since

Darren Clark

45

2011

Marvin H. Fink

76

2001

Howard F. Hill

72

1979

William Reynolds

77

2005

David Sandberg

40

2011

J. Randall Waterfield

39

2011

Darren Clark was appointed to the Board
of Directors on June 15, 2011 following the acquisition by the Company of Cables Unlimited, Inc. on that date. Mr. Clark has been
an executive officer of Cables Unlimited, Inc. since that company was formed in 1992, and the Chief Executive Officer and sole
shareholder of Cables Unlimited since 2005.

Marvin H. Fink is a retired executive. Mr.
Fink most recently served as the Chief Executive Officer, President and Chairman of the Board of Recom Managed Systems, Inc. from
October 2002 to March 2005. Prior thereto, Mr. Fink was President of Teledyne’s Electronics Group. Mr. Fink was employed
at Teledyne for 39 years. He holds a B.E.E. degree from the City College of New York, an M.S.E.E. degree from the University of
Southern California and a J.D. degree from the University of San Fernando Valley. He is a member of the California Bar.

20

Howard F. Hill, a founder of the Company
in 1979, is this Company’s Chief Executive Officer. In addition, since January 18, 2013, Mr. Hill has also served as the
Company’s interim Chief Financial Officer. Mr. Hill has credits in Manufacturing Engineering, Quality Engineering and Industrial
Management. He was the President of the Company from July 1993 until July 2011. He has held various positions in the electronics
industry over the past 43 years.

William Reynolds is a retired financial
executive. Mr. Reynolds most recently was the VP of Finance and Administration for Teledyne Controls from 1994 until his retirement
in 1997. Prior thereto, for 22 years he was the Vice-President of Finance and Administration of Teledyne Microelectronics.
Mr. Reynolds also was a program finance administrator of Teledyne Systems Company for five years. He has a B.B.A. degree in Accounting
from Woodbury College.

David Sandberg
was appointed to the Board of Directors effective September 6, 2011 pursuant to an agreement entered into on August 29, 2011 by
the Company and Red Oak Partners, LLC. Mr. Sandberg is the managing member, founder, and portfolio manager of Red Oak Fund, L.P.,
a NY-based hedge fund, since its March 2003 inception and is the portfolio manager of Pinnacle
Fund, LLLP, since its September 2008 inception. Previously, Mr. Sandberg co-managed JH Whitney & Co.’s Green River Fund
from 1998–2002. Mr. Sandberg received a BA in Economics and a BS in Industrial Management from Carnegie Mellon University.
He is the Chairman for Red Oak Title Acquisition, LLC and presently serves on the Boards of the following public companies:
Asure Software, Inc., SMTC Corporation, EDCI Holdings, Inc. and Planar Systems, Inc.

J. Randall Waterfield was appointed to the
Board of Directors effective September 6, 2011 pursuant to an agreement entered into on August 29, 2011 by the Company and Red
Oak Partners, LLC. Mr. Waterfield has been the Chairman of Waterfield Technologies, Inc., a software development firm focused on
hosted and on-premise custom applications for the financial services, telecommunications and energy sectors since 2000. Mr. Waterfield
is also the Chairman of Waterfield Group, a diversified financial services holding company since 1999. Mr. Waterfield is a Chartered
Financial Analyst, member of the Board of Directors, Executive Committee and former Chairman of the YPO New York City Chapter,
a member of Mensa, and a graduate of Harvard University in 1996. Mr. Waterfield currently also serves on the Board of Directors
of Waterfield Enterprises, LLC, TheRateReport.com, and the Culver Military Summer School. Previously, Mr. Waterfield was at Goldman
Sachs & Co., where he worked as an institutional asset manager from May 1996 through March of 1999, responsible for the small
capitalization growth portfolios whose assets totaled $1.0 billion. Additionally, through his efforts at the Waterfield Foundation,
Mr. Waterfield supports a variety of charitable organizations with a focus on the environment and midwestern based causes.

The Company’s Board of Directors identified
and recommended that Messrs. Clark, Fink, Hill, Reynolds, Sandberg, and Waterfield be elected to the Board of Directors based on
the following qualifications of these persons:

Darren Clark: Mr. Clark is the founder
and has been a principal executive officer of Cables Unlimited, Inc. and, as a result, is familiar with the operations of that
key subsidiary of the Company. In addition, Mr. Clark has expertise in the fiber optic cable industry, an important area of potential
growth for the Company.

David Sandberg: Mr. Sandberg has
significant experience in public securities markets, public company management and finance, as well as expertise in mergers and
acquisitions.

J. Randall Waterfield: Mr. Waterfield
has significant experience in public securities markets and finance, particularly with respect to small capitalization growth companies
such as the Company.

Mr. Marvin Fink: Mr. Fink has significant
experience in a variety of areas important to overseeing the management and operations of this Company, including experience as
an executive officer, an engineer and a lawyer. Mr. Fink has been the principal executive officer of a public company as well as
the President of Teledyne’s Electronics Group. He has degrees in engineering and law and was involved in the electronics
industry for over 40 years.

Mr. Howard Hill: Mr. Hill is a founder
of the Company and has over 43 years of experience in the electronics industry.

Mr. William Reynolds: Mr. Reynolds
has significant accounting and financial management expertise, having served as VP of Finance and Administration for Teledyne Controls,
as the Vice-President of Finance and Administration of Teledyne Microelectronics, and as a program finance administrator of Teledyne
Systems Company. He also has a degree in accounting, which enables him to serve as the “audit committee financial expert”
of the Audit Committee.

Management

Howard F. Hill is the Chief Executive Officer
of the Company and, since January 18, 2013, the interim Chief Financial Officer and Secretary. He co-founded the Company in 1979.
He was the President of the Company from July 1993 until July 2011. Mr. Hill has credits in Manufacturing Engineering, Quality
Engineering and Industrial Management. He has held various positions in the electronics industry over the past 43 years.

21

James Doss is the Company’s President,
a position he has held since July 7, 2011. Mr. Doss joined the Company as its full-time Director of Accounting on February 13,
2006. On February 1, 2007, the Company appointed Mr. Doss as its Acting Chief Financial Officer and Corporate Secretary. Mr. Doss
was appointed as the Company’s Chief Financial Officer on January 25, 2008. On January 18, 2013 Mr. Doss stepped down as
the Company’s Chief Financial Officer and Secretary, and Mr. Hill became the interim Chief Financial Officer until a new,
full-time Chief Financial Officer is hired. Mr. Doss has significantly contributed to the recent growth of the Company, and the
Board has decided that Mr. Doss’ efforts as the President should be focused primarily on the operations of the Company. Prior
to joining the Company, Mr. Doss, 44, was a private consultant to a number of software and high-tech companies, providing general
accounting support. Previously, he was Director of Finance for San Diego-based HomeRelay Communications, Inc., an Internet Service
Provider (ISP). From 1996 to 2000, Mr. Doss was Controller for CliniComp, International, a San Diego medical software developer
and hardware manufacturer of hospital critical care units. In 1995 Mr. Doss joined Denver-based Merrick & Company as Senior
Staff Accountant. Mr. Doss received his B.S. in Finance and minor in Economics from San Diego State University in 1993. The Company
had previously believed, and disclosed, that Mr. Doss had completed his graduate and advanced financial management studies at San
Diego State University and that he had received his MBA. However, the Company was recently informed that Mr. Doss has not fully
completed four courses necessary to earn the MBA degree. Mr. Doss is currently enrolled in the first of the classes needed to complete
the MBA degree.

Board of Director Meetings

During the fiscal year ended October 31,
2012, the Board of Directors held sixmeetings. All members of the Board of Directors hold office
until the next Annual Meeting of Stockholders or the election and qualification of their successors. Executive officers serve at
the discretion of the Board of Directors.

During the fiscal year ended October 31,
2012, each Board of Directors members attended at least 75% of the meetings of the Board of Directors and at least 75% of the meetings
of the committees on which he served.

Board Committees

During fiscal 2012, the Board of Directors
maintained four committees, the Compensation Committee, the Audit Committee, the Strategic committee and the Nominating and Corporate
Governance Committee.

The Audit Committee meets periodically with
the Company’s management and independent registered public accounting firm to, among other things, review the results of
the annual audit and quarterly reviews and discuss the financial statements. The audit committee also hires the independent registered
public accounting firm, and receives and considers the accountant’s comments as to controls, adequacy of staff and management
performance and procedures. The Audit Committee is also authorized to review related party transactions for potential conflicts
of interest and to conduct internal investigations into whistleblower complaints. As of the end of fiscal 2012, the Audit Committee
was composed of Mr. Reynolds (Chairman), Mr. Fink, Mr. Sandberg and Mr. Waterfield. Each of these individuals was a
non-employee director and was independent as defined under the Nasdaq Stock Market’s listing standards. Each of the members
of the Audit Committee has significant knowledge of financial matters, and Mr. Reynolds currently serves as the “audit committee
financial expert” of the Audit Committee. The Company believes that the current members of the Audit Committee can competently
perform the functions required of them as members of the Audit Committee. The Audit Committee met six times during fiscal 2012.
The Audit Committee operates under a formal charter that governs its duties and conduct.

The Compensation Committee currently consists
of Messrs. Fink, Reynolds, Sandberg, and Waterfield (Chairman) each of whom is a non-employee director and is independent as defined
under the Nasdaq Stock Market’s listing standards. The Compensation Committee is responsible for considering and authorizing
remuneration arrangements for senior management. The Compensation Committee held one formal meeting during fiscal 2012, which was
attended by all committee members.

The Strategic Committee was formed in August
2011 for the purpose of assisting the Board in carrying out its responsibilities relating to potential mergers, acquisitions, divestitures,
strategic uses of the Company’s capital, and other key strategic transactions outside the ordinary course of the Company’s
business, and making proposals to the Board with respect to the foregoing. The Strategic Committee currently consists of Messrs.
Sandberg (Chairman), Fink, Waterfield, and Reynolds each of whom is a non-employee director and is independent as defined under
the Nasdaq Stock Market’s listing standards. The Strategic Planning Committee held one formal meeting during fiscal 2012,
which was attended by all committee members.

The Nominating and Corporate Governance
Committee was formed in August 2011 for the purpose of developing and recommending corporate governance guidelines to the Board,
identifying qualified individuals to become directors, recommending selected nominees to serve on the Board, and overseeing the
evaluation of the Board and its committees. The Nominating and Corporate Governance Committee currently consists of Messrs. Sandberg
(Chairman), Fink, Waterfield, and Reynolds each of whom is a non-employee director and is independent as defined under the Nasdaq
Stock Market’s listing standards. The Nominating and Corporate Governance Committee held one formal meeting during fiscal
2012, which was attended by all committee members.

22

Code Of Business Conduct And Ethics

The Company has adopted a Code of Business
Conduct and Ethics (the “Code”) that applies to all of the Company’s Directors, officers and employees, including
its principal executive officer and principal financial officer. The Code is posted on the Company’s website at www.rfindustries.com.
The Company intends to disclose any amendments to the Code by posting such amendments on its website. In addition, any waivers
of the Code for Directors or executive officers of the Company will be disclosed in a report on Form 8-K.

Compliance With Section 16(a) of the Exchange Act

Section 16(a) of the Securities Exchange
Act of 1934 requires the Company’s executive officers and directors, and persons who own more than 10% of a registered class
of the Company’s equity securities, to file reports of ownership and changes in ownership with the Securities and Exchange
Commission (“SEC”). Executive officers, directors and greater than 10% stockholders are required by SEC regulations
to furnish the Company with copies of all Section 16(a) forms they file.

Based solely upon a review of information
furnished to the Company, to the Company’s knowledge, during the fiscal year ended October 31, 2012, Howard Hill did not
timely file a Form 4 with respect to the exercise of stock options in November 2011. Except as set forth above, to the Company’s
knowledge, all officers, directors and greater than ten percent beneficial owners complied with the filing requirements.

ITEM 11.

EXECUTIVE COMPENSATION

Summary of Cash and Other Compensation.
The following table sets forth compensation for services rendered in all capacities to the Company for each person who served the
Company’s Chief Executive Officer during the year, and to each executive officer, other than our Chief Executive Officer,
who earned over $100,000 during the fiscal year ended October 31, 2012 (collectively, the “Named Executive Officers”).
No other executive officer of the Company received salary and bonus, which exceeded $100,000 in the aggregate, during the fiscal
year ended October 31, 2012:

Summary Compensation Table

Name and Principal Position

Year

Salary

($)

Bonus

($)

Stock

Awards

($)

Option

Awards

($)(4)

Non-Equity

Incentive Plan

Compensation

($)

Nonqualified

Deferred

Compensation

Earnings

($)

All Other

Compensation

($)

Total

($)

Howard F. Hill

Chief Executive

2012

240,000

80,000

-

-

-

-

44,367

(1)

364,367

Officer and Director

2011

226,512

80,000

-

11,151

-

-

43,358

(1)

361,021

James S. Doss

President and Chief Financial Officer(3)

2012

168,000

40,000

-

-

-

-

11,642

(2)

219,642

2011

140,619

-

-

31,755

-

-

17,102

(2)

189,475

(1) Mr. Hill’s other compensation
consisted of $27,190 of accrued vacation not taken in fiscal 2012 and $17,177 for vehicle and apartment rental costs. Because Mr.
Hill does not live in San Diego, the Company has maintained an apartment in San Diego for Mr. Hill and some of the other managers
since 1994. The compensation attributable to the use of a Company vehicle represents the value of his personal use of a Company
vehicle.

(2) Mr. Doss’s other compensation
consisted of $1,115 of accrued vacation not taken in fiscal 2012 and $10,527 for vehicle costs.

(3) As of January 18, 2013, Mr. Doss
no longer serves as the Chief Financial Officer; he does, however, continue to serve as the President of the Company.

(4) The amounts in this column represent
the option awards recognized by the Company as an expense for financial reporting purposes. The fair value of these awards and
the amounts expensed were determined in accordance with Financial Accounting Standards Board Statement ASC Topic 718. The assumptions
we use in calculating these amounts are discussed in Note 7, “Stock options,” to the Consolidated Financial Statements.

2012 Option Grants

In fiscal 2012, the Company did not grant
stock options to any Named Executive Officers.

23

Holdings of Previously Awarded Equity

Equity awards held as of October 31, 2012
by each of our Named Executive Officers were issued under our 2000 Stock Option Plan and 2010 Stock Incentive Plan, except for
options to purchase 215,204 shares that were granted to Mr. Hill in 1994 under his employment agreement. The following table sets
forth outstanding equity awards held by our Named Executive Officers as of October 31, 2012:

This option expires one year after Mr. Hill’s employment with the Company terminates.

(2)

Vests annually in three installments following grant on October 31, 2010.

(3)

Vests annually in three installments following grant on October 31, 2011.

(4)

Vests as to 10,000 shares annually following grant on October 31, 2009.

(5)

Vests annually in three installments following grant on October 31, 2010.

(6)

Vests annually in three installments following grant on October 31, 2011.

During the fiscal year ended October 31,
2012, the Company did not adjust or amend the exercise price of stock options awarded to the Named Executive Officers.

Employment Agreements

Mr. Hill previously served
as President and Chief Executive Officer of the Company, pursuant to an employment agreement that expired on June 20, 2011. Effective
July 5, 2011, Mr. Hill resigned as President of the Company (but remained the Chief Executive Officer) and James Doss, then the
Company’s Chief Financial Officer and Corporate Secretary, was appointed as the Company’s President. On January 18,
2013, Mr. Doss stepped down as the Chief Financial Officer and Secretary. Mr. Doss continues to serve as the Company’s President
in charge of operations. The Company has commenced a search for a new Chief Financial Officer. Until a new Chief Financial Officer
is hired, Mr. Hill will serve as this Company’s interim Chief Financial Officer and Secretary.

24

Howard Hill. On
August 22, 2011, the Company entered into a new employment agreement with Howard F. Hill, pursuant to which Mr. Hill will continue
to serve as the Company’s Chief Executive Officer through July 31, 2013 (the “Term”), subject to earlier termination
as provided in the employment agreement. Under the employment agreement, Mr. Hill is currently entitled to receive an annual salary
of $240,000 until the end of the Term. Mr. Hill also is entitled to participate in any pension, retirement, disability, insurance,
medical service, or other employee benefit plan that is generally available to all employees of the Company, to the life insurance
policy and disability insurance policy that the Company currently maintains for Mr. Hill, and to six weeks of paid vacation per
year. Additionally, Mr. Hill is entitled to certain compensation from the Company in connection with the termination of his employment
under the following circumstances: (i) if the Company terminates Mr. Hill’s employment without “cause” (as defined
in the employment agreement), the Company has agreed to pay Mr. Hill upon termination an amount equal to the greater of (x) the
salary that would have been paid to Mr. Hill during the balance of the Term, or (y) 12 month’s salary (in each case, based
on Mr. Hill’s monthly salary at the time of such termination); (ii) if Mr. Hill terminates his employment for Good Reason
(as defined in the employment agreement), Mr. Hill is entitled to severance compensation in the form of continuation of base salary
and existing medical and dental insurance for 24 months following termination of employment; and (iii) within 120 days after a
Change of Control (as defined in the employment agreement), Mr. Hill will have the right to terminate his employment, and to receive
a cash payment in an amount equal to the greater of (x) the salary that would have been paid to Mr. Hill during the balance of
the Term, or (y) 12 month’s salary (in each case, based on Mr. Hill’s monthly salary at the time of such termination).
In order to further incentivize Mr. Hill, the Company has implemented a non-guaranteed bonus plan under which Mr. Hill can earn
a year-end bonus of up to 45% of his annual base salary based on both targets and other factors established by the Company’s
Compensation Committee. These bonus targets and subjective vary from year to year based on the Company’s current circumstances
and goals. In general, the factors used to determine the size of any year-end bonus that the Compensation Committee may approve
include financial targets (such a EBITDA targets) and qualitative metrics (such as adherence to specified corporate policies, customer
acquisition and diversification goals, and timeliness in the filing of Company reports).

James Doss.
The Company does not have a written employment agreement with James Doss, the President of the Company. Mr. Doss currently receives
an annual salary of $168,000. In addition, Mr. Doss can earn a year-end bonus of up to 35% of his annual base salary based on both
targets and other factors established by the Company’s Compensation Committee. These factors are similar to those established
for Mr. Hill, but are typically tailored to Mr. Doss’ duties.

Darren Clark. On June 15, 2011, the
Company also entered into an employment agreement with Darren Clark, pursuant to which Darren Clark has agreed to serve as Cables
Unlimited's Chief Executive Officer through June 15, 2013, subject to earlier termination as provided in the Employment Agreement.
Under the Employment Agreement, Mr. Clark is entitled to an annual salary of $150,000. Additionally, Mr. Clark is eligible to participate,
to the extent that he is eligible under the terms and conditions thereof, in any pension, retirement, disability, insurance, medical
service, or other employee benefit plan that is generally available to all employees of the Company and that may be in effect from
time to time during the period of Mr. Clark's employment under the Employment Agreement.

Compensation of Directors

In 2012, upon the recommendation of the
Compensation Committee, the Company changed its Board of Director compensation policies. Under the new compensation policies that
are currently in effect, directors who also are officers and/or employees of the Company do not receive any compensation for serving
on the Board. Non-employee directors (i.e. directors who are not employed by the Company as officers or employees) now receive
$25,000 annually, which amount is paid one-half in cash, and one-half through the grant of stock options to purchase shares of
the Company’s common stock. Mr. Sandberg previously agreed to be excluded from these payments until September 2012. The number
of stock option shares granted to each director was determined by dividing $12,500 by the fair value of a Stock Option grant using
the Black Scholes model ($1.09 per share). On August 29, 2012 the Company granted three of the outside directors (excluding Mr.
Sandberg) stock options to purchase 11,468 shares. Mr. Sandberg was granted 1,911 for the remainder of fiscal 2012. The stock options
have an exercise price of $4.12.

DIRECTOR COMPENSATION FOR FISCAL YEAR
2012

Name

Fees Earned or Paid in Cash

Stock Awards

OptionAwards(1)(2)(3)

All Other Compensation

Total

Darren Clark

$

-

15,000

$

21,090

$

-

$

21,090

Marvin H. Fink (4)

$

14,375

19,468

$

23,638

$

-

$

38,013

Howard F. Hill

$

-

-

$

-

$

-

$

-

William L. Reynolds (4)

$

11,875

15,468

$

18,069

$

-

$

29,944

J. Randall Waterfield (4)

$

13,542

11,468

$

12,500

$

-

$

26,042

David Sandberg

$

-

1,911

$

2,083

$

-

$

2,083

25

(1)

This column represents the aggregate grant date fair value of option awards computed in accordance
with FASB ASC Topic 718, excluding the effect of estimated forfeitures related to service-based vesting conditions. These amounts
do not correspond to the actual value that will be recognized by the named directors from these awards.

(2)

On February 3, 2012 we granted a five-year non-qualified options to purchase 8,000 shares and 4,000
shares, respectively, of the Company’s common stock to Mr. Marvin Fink (Chairman) and Mr. William Reynolds (Independent Director)
for their services as directors for the fiscal year ended October 31, 2012. The options have an exercise price of $3.91 per share.

(3)

On August 30, 2012, we granted a five-year non-qualified option to purchase 11,468 shares of the
Company’s common stock to each of Marvin Fink, William Reynolds, and J. Randall Waterfield for services rendered as independent
members of the Board of Directors for the Corporation for the fiscal year ending October 31, 2012, and options to purchase 1,911
shares to David Sandberg (as compensation for services to be rendered as an independent director in September and October 2012.
All of the foregoing options were granted at an exercise price of $4.12 per share.

(4)

The total compensation received by these directors in
2012 exceeds the annual limit of $25,000 because certain compensation paid in 2012 represents amounts due, but not paid, in 2011.

Under the Company’s prior director
compensation policy in effect in fiscal 2011, new directors received a one-time initial grant of options to purchase 15,000 shares
following their new director joins the Board. Accordingly, Darren Clark was entitled to receive options to purchase 15,000 shares,
which options were granted on December 22, 2011. Mr. Clark’s options to purchase 15,000 shares were granted at an exercise
price of $3.69 per share.

The following table sets forth certain information
regarding the ownership of the Company’s Common Stock as of January 14, 2013 for (i) each director; (ii) the Company’s
Named Executive Officers; (iii) all executive officers and directors of the Company as a group; and (iv) all those known by the
Company to be beneficial owners of more than 5% of the Common Stock. As of January 14, 2013, there were 7,215,020 shares of Common
Stock issued and outstanding.

Shares of Common Stock, which were not outstanding but which could be acquired upon exercise of an option within 60 days from
the date of this filing, are considered outstanding for the purpose of computing the percentage of outstanding shares beneficially
owned. However, such shares are not considered to be outstanding for any other purpose.

(2)

Includes 382,409 shares that Mr. Hill has the right to acquire upon exercise of options exercisable within 60 days.

(3)

Includes 120,475 shares that Mr. Doss has the right to acquire upon exercise of options exercisable within 60 days.

(4)

Represents shares owned by Red Oak Partners, LLC, a New York limited liability company, The Red Oak Fund, LP, a Delaware limited
partnership, and Pinnacle Fund LLLP, a Colorado limited liability limited partnership. Red Oak Partners, LLC is the
general partner of The Red Oak Fund, LP and a managing member of Pinnacle Fund LLLP. David Sandberg, is the controlling
member of Red Oak Partners, LLC. ) Includes 1,911 shares that Mr. Sandberg has the right to acquire upon exercise of options exercisable
within 60 days.

(5)

Includes 11,468 shares that Mr. Waterfield has the right to acquire upon exercise of options exercisable within 60 days.

(6)

Includes 39,468 shares that Mr. Fink has the right to acquire upon exercise of options exercisable within 60 days.

(7)

Includes 59,468 shares, which Mr. Reynolds has the right to acquire upon exercise of options exercisable within 60 days.

(8)

Includes 15,000 shares, which Mr. Clark has the right to acquire upon exercise of options exercisable within 60 days.

(9)

Includes 630,199 shares, which the directors and officers have the right to acquire upon exercise of options exercisable
within 60 days.

On April 1, 1997, the Company loaned to
Howard Hill, its President, at that time, and Chief Executive Officer, $70,000 pursuant to a Promissory Note which provides for
interest at the rate of 6% per annum and which has no specific due date for principal repayment. As of October 31, 2011, the principal
balance still outstanding on the loan was $66,980. Mr. Hill pays interest on the loan annually. The note is collateralized by personal
property owned by Mr. Hill.

On June 15, 2011, the Company purchased
Cables Unlimited, Inc., a New York corporation, from Darren Clark, the sole shareholder of Cables Unlimited, Inc. In connection
with the purchase of Cables Unlimited, the Company entered into a five-year lease for the New
York facilities from which Cables Unlimited conducts its operations. Cables Unlimited’s monthly rent expense under
the lease is $13,000 per month, plus payments of all utilities, janitorial expenses, routine maintenance costs, and costs of insurance
for Cables Unlimited’s business operations and equipment. During the fiscal year ended October 31, 2012, the Company paid
the landlord a total of $156,000 under the lease. The owner and landlord of the facility is a company controlled by Darren Clark,
the former owner of Cables Unlimited and a current director of the Company.

ITEM 14.

PRINCIPAL ACCOUNTING FEES AND SERVICES

Audit Fees

The following is a summary of the fees billed
to the Company by CohnReznick LLP, formerly J.H. Cohn LLP, for professional services rendered related to the fiscal years ended
October 31, 2012 and 2011:

Fee Category

2012

2011

Audit Fees

$

263,000

$

161,000

Audit-Related Fees

-

189,000

Total Fees

$

263,000

$

350,000

27

Audit Fees . Consists
of fees billed and estimated for professional services rendered for the audit of the Company’s annual financial statements
and review of the interim financial statements included in quarterly reports and services that are normally provided by CohnReznick
LLP in connection with statutory and regulatory filings or engagements.

Audit-Related Fees . Consists
of fees billed and estimates for assurance and related services that are reasonably related to the performance of the audit and
review of the Company’s financial statements and are not reported under “Audit Fees.” These services include
professional services requested by the Company in connection with its preparation for compliance with Section 404 of the Sarbanes-Oxley
Act of 2002, accounting consultations in connection with acquisitions and consultations concerning financial accounting and reporting
standards. The decrease in these fees is due mainly to work related to the acquisition of Cables Unlimited in 2011.

ITEM 15.

EXHIBITS

The following exhibits are filed as part
of this report:

3.1

Articles of Incorporation, as amended (1)

3.1.1

Amended and Restated Articles of Incorporation (12)

3.2.1

Company Bylaws as Amended through August, 1985 (2)

3.2.2

Amendment to Bylaws dated January 24, 1986 (2)

3.2.3

Amendment to Bylaws dated February 1, 1989 (3)

3.2.4

Amendment to Bylaws dated June 9, 2006(6)

3.2.5

Amendment to Bylaws dated September 7, 2007(7)

10.1

Form of 2000 Stock Option Plan (4)

10.2

Directors’ Nonqualified Stock Option Agreements (2)

10.3

Employment Agreement, dated August 22, 2011, between the Company and Howard Hill (8)

(1) Previously
filed as an exhibit to the Company’s Form 10-KSB for the year ended October 31, 2000, which exhibit is hereby incorporated
herein by reference.

(2) Previously
filed as an exhibit to the Company’s Form 10- KSB for the year ended October 31, 1987, which exhibit is hereby incorporated
herein by reference.

(3) Previously
filed as an exhibit to the Company’s Form 10- KSB for the year ended October 31, 1992, which exhibit is hereby incorporated
herein by reference.

(4) Previously
filed as an exhibit to the Company’s Form 10-QSB for the quarter ended January 31, 2001, which exhibit is hereby incorporated
herein by reference.

(5) Previously
filed as an exhibit to the Company’s Form 10- KSB for the year ended October 31, 2003, which exhibit is hereby incorporated
herein by reference.

(6) Previously
filed as an exhibit to the Company’s Form 8-K, dated June 9, 2006, which exhibit is hereby incorporated herein by reference.

(7) Previously
filed as an exhibit to the Company’s Form 10- KSB for the year ended October 31, 2007, which exhibit is hereby incorporated
herein by reference.

(8) Previously
filed as an exhibit to the Company’s Form 8-K, dated June 5, 2008, which exhibit is hereby incorporated herein by reference.

(9) Previously
filed as an exhibit to the Company’s Form 10- K for the year ended October 31, 2009, which exhibit is hereby incorporated
herein by reference.

(10) Previously
filed as an exhibit to the Company’s Registration Statement on Form S-8, filed on September 20, 2010, which exhibit is hereby
incorporated herein by reference.

(11) Previously
filed as an exhibit to the Company’s Registration Statement on Form S-8, filed on September 20, 2010, which exhibit is hereby
incorporated herein by reference.

(12) Previously
filed as an exhibit to the Company’s definitive proxy statement filed on July 12, 2012, which exhibit is hereby incorporated
herein by reference.

(13) Previously
filed as an exhibit to the Company’s Form 10- K for the year ended October 31, 2011, which exhibit is hereby incorporated
herein by reference.

Stockholders of the Company may obtain a copy of any exhibit
referenced in this Annual Report on Form 10-K by writing to: Secretary, RF Industries, Ltd., 7610 Miramar Road, Bldg. 6000, San
Diego, CA 92126. The written request must specify the stockholder’s good faith representation that such stockholder is a
stockholder of record of common stock of the Company.

29

RF INDUSTRIES, LTD. AND SUBSIDIARY

Index

Page

Report of Independent Registered Public Accounting Firm

F-2

Consolidated Balance Sheets

October 31, 2012 and 2011

F-3 & F-4

Consolidated Statements of Income

Years Ended October 31, 2012 and 2011

F-5

Consolidated Statements of Equity

Years Ended October 31, 2012 and 2011

F-6

Consolidated Statements of Cash Flows

Years Ended October 31, 2012 and 2011

F-7

Notes to Consolidated Financial Statements

F-8-F-20

* * *

F-1

Report of Independent Registered Public
Accounting Firm

To the Stockholders

RF Industries, Ltd.

We have audited the accompanying consolidated
balance sheets of RF Industries, Ltd. and Subsidiary as of October 31, 2012 and 2011, and the related consolidated statements of
income, equity and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with
the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial
statements referred to above present fairly, in all material respects, the financial position of RF Industries, Ltd. and Subsidiary
as of October 31, 2012 and 2011, and their results of operations and cash flows for the years then ended, in conformity with accounting
principles generally accepted in the United States of America.

/s/ CohnReznick LLP

San Diego, California

January 22, 2013

F-2

RF INDUSTRIES, LTD. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

OCTOBER 31, 2012 AND 2011

2012

2011

ASSETS

Current assets:

Cash and cash equivalents ($420,663 for settlement of VIE obligations at October 31, 2011)

$

5,491,768

$

1,760,816

Restricted cash (all related to VIE)

-

66,926

Certificates of deposit

-

4,094,724

Trade accounts receivable, net of allowance for doubtful accounts of $95,500 and $102,736, respectively ($809,120 for settlement of VIE obligations at October 31, 2011)

5,167,012

2,605,965

Inventories ($487,687 for settlement of VIE obligations at October 31, 2011)

6,984,546

6,189,601

Other current assets ($33,263 for settlement of VIE obligations at October 31, 2011)

639,954

511,832

Prepaid income taxes

-

572,642

Deferred tax assets ($42,100 for settlement of VIE obligations at October 31, 2011)

760,966

610,700

Total current assets

19,044,246

16,413,206

Property and equipment:

Land and building ($1,548,100 of collateral for VIE obligations at October 31, 2011)

-

1,548,100

Equipment and tooling ($305,399 for settlement of VIE obligations at October 31, 2011)

2,348,955

2,938,388

Furniture and office equipment ($16,150 for settlement of VIE obligations at October 31, 2011)

655,714

575,586

3,004,669

5,062,074

Less accumulated depreciation

1,800,371

2,619,336

Total property and equipment

1,204,298

2,442,738

Goodwill

3,076,023

3,076,023

Amortizable intangible assets, net

1,627,213

1,866,171

Non-amortizable intangible assets

410,000

410,000

Note receivable from stockholder

66,980

66,980

Other assets ($70,668 for settlement of VIE obligations at October 31, 2011)

The Company’s business is comprised
of the design, manufacture and/or sale of communications equipment primarily to the radio and other professional communications
related industries. The Company currently conducts its operations through seven related business divisions: (i) RF Connector and
Cable Division is engaged in the design, manufacture and distribution of coaxial connectors and cable assemblies used primarily
in radio and other professional communications applications; (ii) Aviel Division is engaged in the design, manufacture and sales
of radio frequency, microwave and specialized connectors and connector assemblies for aerospace, original electronics manufacturers
and military electronics applications; (iii) Oddcables.com Division is engaged in sales of microwave and radio frequency connectors
and cable assemblies to end users in multi-media, radio and other communications applications; (iv) Bioconnect Division is engaged
in the design, manufacture and sales of cable interconnects for medical monitoring applications; (v) Neulink Division is engaged
in the design, manufacture and sales of radio links for receiving and transmitting control signals for remote operation and monitoring
of equipment, personnel and monitoring services; (vi) RadioMobile Division is engaged as an OEM provider of end-to-end mobile management
solutions implemented over wireless networks. RadioMobile Division operates as a separate division and supplements the operations
of the Company’s Neulink division; and (vii) the Cables Unlimited Division manufactures custom and standard cable assemblies,
adapters, and electromechanical wiring harnesses for communication, computer, LAN, automotive and medical equipment and is a Corning
Cables Systems CAH Connections SM Gold Program member, authorized to manufacture fiber optic cable assemblies that are backed by
Corning Cables Systems’ extended warranty (see Note 11).

Use of estimates

The preparation of consolidated financial
statements in conformity with accounting principles generally accepted in the United States of America requires management to make
estimates and assumptions that affect certain reported amounts and disclosures. Actual results may differ from those estimates.

Principles of consolidation

The accompanying consolidated financial
statements include the accounts of RF Industries, Ltd., Cables Unlimited, Inc. (“Cables Unlimited”), the Company’s
wholly-owned subsidiary and K&K Unlimited (“K&K”) until this variable investment entity (“VIE”)
was deconsolidated in the first quarter of 2012. All intercompany balances and transactions have been eliminated in consolidation.

Cash equivalents

The Company considers all highly-liquid
investments with a maturity of twelve months or less when purchased to be cash equivalents.

Revenue recognition

Four basic criteria must be met before revenue
can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services rendered; (3) the fee
is fixed and determinable; and (4) collectability is reasonably assured. The Company recognizes revenue from product sales after
purchase orders are received which contain a fixed price and the products are shipped. Most of the Company’s products are
sold to continuing customers with established credit histories.

Inventories

Inventories, consisting of materials, labor
and manufacturing overhead, are stated at the lower of cost or market. Cost has been determined using the weighted average cost
method.

Property and equipment

Equipment, tooling
and furniture are recorded at cost and depreciated over their estimated useful lives (generally 3 to 7 years) using the straight-line
method. The VIE’s building is recorded at cost and depreciated over its estimated useful life (39 years) using the straight-line
method. Expenditures for repairs and maintenance are charged to operations in the period incurred.

F-8

Deferred financing costs

The VIE was deconsolidated
in the first quarter ended January 31, 2012 and there are no deferred financing costs at October 31, 2012.

Variable interest entity

Management analyzes if the Company has any
variable interests in VIE’s. This analysis includes a qualitative review based on an evaluation of the design
of the entity, its organizational structure, including decision making ability and financial agreements, as well as a quantitative
review. Accounting principles generally accepted in the United States of America require a reporting entity to consolidate
a VIE when the reporting entity has a variable interest that provides it with a controlling financial interest in the VIE. The
entity that consolidates a VIE is referred to as the primary beneficiary of the VIE. See Note 12 for further discussion.

Goodwill

Goodwill is recorded when the purchase price paid for an acquisition
exceeds the estimated fair value of the net identified tangible and intangible assets acquired. Goodwill is not amortized, but
is subject to impairment analysis at least once annually or more frequently upon the occurrence of an event or when circumstances
indicate that a reporting unit’s carrying amount is greater than its fair value. At October 31, 2012, the Company performed
a qualitative assessment of factors to determine whether it was necessary to perform the impairment testing. Based on the results
of the work performed, the Company concluded that no impairment loss was warranted at October 31, 2012. Qualitative factors considered
in this assessment include industry and market considerations, overall financial performance and other relevant events, management
expertise and stability at key positions. Additional impairment analyses at future dates may be performed to determine if indicators
of impairment are present, and if so, such amount will be determined and the associated charge will be recorded to the Consolidated
Statement of Income.

On June 15, 2011 the Company completed its
acquisition of Cables Unlimited. Goodwill related to this acquisition is included within the Cables Unlimited reporting unit. As
of October 31, 2012, the goodwill balance related solely to the Cables Unlimited acquisition. No goodwill impairment occurred in
2012 or 2011; all remaining goodwill at October 31, 2012 relates to the acquisition of Cables Unlimited in June 2011.

Long-lived assets

The Company assesses potential impairments
to its long-lived assets when there is evidence that events or changes in circumstances indicate that the carrying amount of an
asset may not be recovered. An impairment loss is recognized when the undiscounted cash flows expected to be generated by an asset
(or group of assets) is less than its carrying amount. Any required impairment loss is measured as the amount by which the assets
carrying value exceeds its fair value, and is recorded as a reduction in the carrying value of the related asset and a charge to
operations.

Amortization of amortizable
intangible assets is provided over their estimated useful lives on a straight-line basis. There was no retirement of fully amortized
intangible assets in 2012. In fiscal 2011, the Company retired $81,000 of fully amortized intangible assets, impacting both the
gross carrying amount and accumulated amortization for this amount.

Advertising

The Company expenses the cost of advertising
and promotions as incurred. Advertising costs charged to operations were approximately $242,000 and $244,000 in 2012 and 2011,
respectively.

Research and development

The Company expenses research and development
costs as incurred. Research and development costs charged to operations and included in engineering were approximately $470,000
and $622,000 in 2012 and 2011, respectively.

Income taxes

The Company accounts for income taxes under
the asset and liability method, based on the income tax laws and rates in the jurisdictions in which operations are conducted and
income is earned. This approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences
of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Developing the provision for
income taxes requires significant judgment and expertise in Federal, international and state income tax laws, regulations and strategies,
including the determination of deferred tax assets and liabilities and, if necessary, any valuation allowances that may be required
for deferred tax assets. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected
to be realized. Management’s judgments and tax strategies are subject to audit by various taxing authorities.

The Company recognizes accrued interest
and penalties related to unrecognized tax benefits as a component of income tax expense.

Stock options

For stock option grants to employees, the
Company recognizes compensation expense based on the estimated fair values of the options at date of grant. Stock based employee
compensation expense is recognized on the straight-line basis over the requisite service period. The Company issues previously
unissued common shares upon exercise of stock options.

For the fiscal years ended October 31, 2012
and 2011, charges related to stock based compensation amounted to approximately $264,000 and $312,000, respectively. For
the fiscal years ended October 31, 2012 and 2011, stock based compensation classified in cost of sales amounted to $53,000 and
$61,000 and stock based compensation classified in selling, general and engineering expense amounted to $211,000 and $251,000 respectively.

Earnings per share

Basic earnings per share is calculated by
dividing net income applicable to common stockholders by the weighted average number of common shares outstanding during the period.
The calculation of diluted earnings per share is similar to that of basic earnings per share, except that the denominator is increased
to include the number of additional common shares that would have been outstanding if all potentially dilutive common shares, principally
those issuable upon the exercise of stock options, were issued and the treasury stock method had been applied during the period.
The greatest number of shares potentially issuable by the Company upon the exercise of stock options in any period for the years
ended October 31, 2012 and 2011, that were not included in the computation because they were anti-dilutive, totaled 755,568 and
590,968, respectively.

F-10

The following table summarizes the calculation
of basic and diluted earnings per share:

In May 2011, the Financial Accounting Standards
Board (“FASB”) issued guidance that amends U.S. GAAP to conform it to fair value measurement and disclosure requirements
in International Financial Reporting Standards (“IFRS”). The amendments changed the wording used to describe the requirements
in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements. The provisions of this guidance,
which were adopted effective for the Company’s quarter ended January 31, 2012, did not have a material impact on the Company’s
consolidated results of operations, financial condition or disclosure.

In September 2011, the FASB issued new accounting
guidance intended to simplify how an entity tests goodwill for impairment. The guidance permits an entity to first assess qualitative
factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. An entity is no longer
require to calculate the fair value of a reporting unit unless the entity determines, based on a qualitative assessment, that it
is more likely than not that its fair value is less than its carrying amount. The new accounting guidance is effective for fiscal
years and interim periods with those years, beginning after December 15, 2011, with early adoption permitted. The early adoption
of this guidance during fiscal 2012 did not have a material impact on the Company’s consolidated financial condition or results
of operations.

In July 2012, the FASB issued new accounting
guidance that allows entities to first assess qualitative factors to determine whether the existence of events and circumstances
indicates that it is more likely than not that the indefinite-lived intangible asset is impaired. If, after assessing the totality
of events and circumstances, an entity concludes that it is not more likely than not that the indefinite-lived intangible asset
is impaired, then the entity is not required to take further action. However, if an entity concludes otherwise, then it is required
to determine the fair value of the indefinite-lived intangible asset and perform the quantitative impairment test by comparing
the fair value with the carrying amount. An entity also has the option to bypass the qualitative assessment for any indefinite-lived
intangible asset in any period and proceed directly to performing the quantitative impairment test. An entity will be able to resume
performing the qualitative assessment in any subsequent period. The guidance is effective for fiscal years beginning after September
15, 2012, with early adoption permitted. The early adoption of this guidance during fiscal 2012 did not have a material impact
on the Company’s consolidated financial condition or results of operations.

New accounting standards not yet adopted-

In June 2011, the FASB issued new accounting
guidance on the presentation of other comprehensive income. The guidance eliminates the current option to present components of
other comprehensive income as part of the statement of changes in equity. Instead, an entity has the option to present the total
of comprehensive income, the components of net income and the components of other comprehensive income either in a single continuous
statement of comprehensive income or in two separate but consecutive statements. The new accounting guidance is effective for fiscal
years, and interim periods within those years, beginning after December 15, 2011, with early adoption permitted. Full retrospective
application is required. As the new accounting guidance will only amend the presentation requirements of other comprehensive income,
the Company does not expect the adoption to have a significant impact on its consolidated financial condition or results of operations.

Note 2 - Concentration of credit risk and sales to major
customers

Financial instruments which potentially
subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. The
Company maintains its cash and cash equivalents with high-credit quality financial institutions. At October 31, 2012, the Company
had cash and cash equivalent balances in excess of Federally insured limits in the amount of approximately $750,000.

Accounts receivable are financial instruments
that also expose the Company to concentration of credit risk. Such exposure is limited by the large number of customers comprising
the Company's customer base and their dispersion across different geographic areas. In addition, the Company routinely assesses
the financial strength of its customers and maintains an allowance for doubtful accounts that management believes will adequately
provide for credit losses.

Sales to one customer represented 33% and
17% of total sales in 2012 and 2011, respectively, and 49% and 14% of total accounts receivable as of October 31, 2012 and
2011, respectively. The Company has a standard written distributor agreement with this customer and, therefore, this customer does
not have any minimum purchase obligations and could stop buying the Company’s products at any time. A reduction, delay or
cancellation of orders from this customer or the loss of this customer could significantly reduce the Company’s revenues
and profits.

F-11

Sales
of one product line, Optiflex, represented $5,569,070 or 18% of total sales to one customer in 2012.The
Company has a standard written purchase order with this customer and, therefore, this customer does not have any minimum purchase
obligations and could stop buying the Optiflex products at any time. A reduction, delay or cancellation of orders from this product
or the loss of this customer could significantly reduce the Company’s revenues and profits.

Note 3 - Inventories and major vendors

Inventories consist of the following as
of October 31:

2012

2011

Raw materials and supplies

$

2,518,937

$

2,023,108

Work in process

2,863

5,425

Finished goods

4,630,174

4,309,914

Less inventory reserve

(167,428

)

(148,846

)

Totals

$

6,984,546

$

6,189,601

Inventory purchases of products from two
major vendors represented 20% and 14% of total inventory purchases in 2012, while purchases of connector products from two major
vendors represented 22% and 13% of total inventory purchases in 2011. The Company has arrangements with these vendors to purchase
product based on purchase orders periodically issued by the Company.

Note 4 - Commitments

The Company leases its facilities in San
Diego, California, Yaphank, New York and Las Vegas, Nevada under non-cancelable operating leases. The Company amended its San Diego
lease in March 2009 extending the term of the lease and again in September 2009 adding additional square feet. The amended
lease expires in March 2014 and requires minimum annual rental payments that are subject to fixed annual increases. The minimum
annual rentals under this lease are being charged to expense on the straight-line basis over the lease term. Deferred rents, included
in accrued expenses and other long-term liabilities, were $54,000 as of October 31, 2012 and $81,000 as of October 31, 2011. The
San Diego lease also requires the payment of the Company's pro rata share of the real estate taxes and insurance, maintenance and
other operating expenses related to the facilities. The Oddcables.com division operations include a warehouse and retail space.
The Company also leases certain automobiles under operating leases which expire at various dates through June 2015.

Rent expense under all operating leases
totaled approximately $624,000 and $508,000 in 2012 and 2011, respectively.

Minimum lease payments under these non-cancelable
operating leases in each of the years subsequent to October 31, 2012 are as follows:

Year Ending

October 31,

Amount

2013

$

638,000

2014

381,000

2015

196,000

2016

116,000

2017

2,000

Total

$

1,333,000

The Company entered into an employment agreement
with its President and Chief Financial Officer on August 22, 2012, and with its Chief Executive Officer on August 1, 2011. The
employment agreement with the President and Chief Financial Officer expired on July 31, 2012, and the employment agreement with
the Chief Executive Officer will expire on July 31, 2013. The Company also has an employment agreement with the President of its
Cables Unlimited Division, which commenced on June 15, 2011, and ends on June 15, 2013. The aggregate amount of compensation to
be provided over the remaining term of the employment agreements amounted to approximately $300,000 and $608,000 at October
31, 2012 and 2011, respectively.

Note 5 - Segment information

The Company aggregates operating divisions
into operating segments which have similar economic characteristics and divisions are similar in the majority of the following
areas: (1) the nature of the product and services; (2) the nature of the production process; (3) the type or class of customer
for their products and services; (4) the methods used to distribute their products or services; (5) if applicable, the nature of
the regulatory environment. The Company has four segments - RF Connector and Cable Assembly, Medical Cabling and Interconnector,
RF Wireless, and Cables Unlimited based upon this evaluation.

F-12

The RF Connector and Cable Assembly segment is comprised
of three divisions, the Cables Unlimited segment and the Medical Cabling and Interconnector segment are each comprised of one division,
while the RF Wireless segment is comprised of two divisions. The four divisions that meet the quantitative thresholds
for segment reporting are Connector & Cable Assembly, Cables Unlimited, Bioconnect and RF Neulink. Each of the other divisions
aggregated into these segments have similar products that are marketed to their respective customer base; production and product
development processes are similar in nature. The specific customers are different for each division; however, there is some
overlapping of product sales to them. The methods used to distribute products are similar within each division aggregated.

Management identifies the Company’s
segments based on strategic business units that are, in turn, based along market lines. These strategic business units offer products
and services to different markets in accordance with their customer base and product usage. For segment reporting purposes, the
Company aggregates the Connector & Cable Assembly, Aviel, and Oddcables.com divisions into the RF Connector and Cable Assembly
segment, while the Cables Unlimited division constitutes the Cables Unlimited segment. The Bioconnect Division makes up the Medical
Cabling and Interconnector segment, and the RF Neulink and RadioMobile divisions make up the RF Wireless segment.

As reviewed by the Company’s chief
operating decision maker, the Company evaluates the performance of each segment based on income or loss before income taxes. The
Company charges depreciation and amortization directly to each division within the segment. All stock based compensation is attributed
to the RF Connector and Cable Assembly segment. Inventory, fixed assets, goodwill and intangible assets are the only assets identified
by segment. Except as discussed above, the accounting policies for segment reporting are the same as for the Company as a whole.

Substantially all of the Company’s
operations are conducted in the United States; however, the Company derives a portion of its revenue from export sales. The Company
attributes sales to geographic areas based on the location of the customers. The following table presents the sales of the Company
by geographic area for the years ended October 31, 2012 and 2011:

2012

2011

United States

$

28,621,502

$

17,330,928

Foreign countries:

Canada

830,262

1,117,660

Israel

256,967

386,426

Mexico

396,954

388,191

All other

126,968

210,298

Totals

$

30,232,653

$

19,433,503

Net sales, income (loss) before provision
for income taxes and other related segment information as of October 31, 2012 and 2011, and for the years then ended follows:

RF Connectors
and Cable Assembly

Cables
Unlimited

Medical
Cabling and Interconnector

RF Wireless

Corporate

Total

2012

Net sales

$

14,176,074

$

10,912,717

$

2,598,383

$

2,545,479

$

-

$

30,232,653

Income before provision for income taxes

1,599,461

1,719,522

652,533

126,595

14,798

4,112,909

Depreciation and amortization

215,704

340,058

40,409

3,653

-

599,824

Total assets

5,364,284

6,902,164

575,209

475,151

12,146,610

25,463,418

Additions to equipment
and furnishings

304,586

276,025

-

9,489

-

590,100

2011

Net sales

$

13,867,770

$

2,643,552

$

2,153,639

$

768,542

$

-

$

19,433,503

Income (loss) before provision for income taxes

1,317,319

21,757

438,839

(669,383

)

43,311

1,151,843

Depreciation, amortization and impairment

177,329

179,607

32,811

1,886

-

391,633

Total assets

5,280,427

7,614,660

585,557

503,890

10,393,412

24,377,946

Additions to equipment
and furnishings

272,606

18,549

77,050

-

-

368,205

F-13

Note 6 - Income taxes

The provision (benefit) for income taxes
consists of the following:

2012

2011

Current:

Federal

$

1,330,935

$

318,148

State

314,863

43,744

1,645,798

361,892

Deferred:

Federal

(141,892

)

24,540

State

(3,419

)

(7,600

)

(145,311

)

16,940

Totals

$

1,500,487

$

378,832

F-14

Income tax at the Federal statutory rate
is reconciled to the Company's actual net provision for income taxes as follows:

2012

2011

Amount

% of Pretax Income

Amount

% of Pretax Income

Income tax at Federal statutory rate

$

1,397,891

34.0

%

$

392,500

34.1

%

State tax provision, net of Federal tax benefit

229,928

5.6

23,855

2.1

Nondeductible differences:

ISO stock options, net

7,182

0.2

16,297

1.4

Business acquisition costs

-

-

131,504

11.4

Qualified domestic production deduction

(46,121

)

(1.1

)

-

-

Other

36,252

0.9

-

-

Uncertain tax positions

(79,223

)

(1.9

)

(116,284

)

(10.1

)

R&D credit

-

-

(86,166

)

(7.5

)

Other

(45,422

)

(1.2

)

17,126

1.5

Provision for income taxes

$

1,500,487

36.5

%

$

378,832

32.9

%

The Company's total deferred tax assets
and deferred tax liabilities at October 31, 2012 and 2011 are as follows:

2012

2011

Current Assets:

Allowance for doubtful accounts

$

37,500

$

40,000

Inventory obsolescence

65,700

58,600

Accrued vacation

154,000

114,100

State income taxes

118,400

19,700

Stock based compensation awards

235,600

209,600

Section 263A costs

128,800

132,800

Other

20,966

35,900

Total current assets

760,966

610,700

Long-Term Assets:

Amortization / intangible assets

103,400

116,900

Long-Term Liabilities:

Amortization / intangible assets

(799,400

)

(880,600

)

Depreciation / equipment and furnishings

(381,157

)

(308,500

)

Net long-term deferred tax liabilities

(1,077,157

)

(1,072,200

)

Total deferred tax liabilities

$

(316,191

)

$

(461,500

)

A reconciliation of the beginning and ending
amount of unrecognized tax benefits is as follow:

Balance at November 1, 2010

$

216,171

Lapse of statute of limitations- tax positions in prior period

(136,948

)

Balance at October 31, 2011

79,223

Lapse of statute of limitations - tax positions in prior period

(79,223

)

Balance at October 31, 2012

$

-

The Company had no gross liability for unrecognized
tax benefits at October 31, 2012. At October 31, 2011 the Company’s total gross liability for unrecognized tax benefits was
$79,223, including $18,947 of interest and penalties.

During the year ended October 31, 2012,
a reduction of $18,947 of interest was a result of the expiration of the statute of limitations. As of October 31, 2012, $0
of accrued interest and penalties were included in other long-term liabilities in the balance sheet. As of October 31, 2011, $18,947
of accrued interest and penalties were included in other long-term liabilities in the balance sheet.

F-15

The Company is currently not undergoing
any tax examinations. Tax fiscal years ended October 31, 2008 through October 31, 2012 remain subject to examinations.

Note 7 - Stock options

Incentive and non-qualified stock option plans

In May 2000, the Board of Directors adopted the Company’s 2000 Stock Option Plan (the “2000
Option Plan”). Under the 2000 Option Plan, the Company was authorized to grant options to purchase shares of common stock
to officers, directors, key employees and others providing services to the Company. The number of shares of common stock that the
Company was authorized to issue under options granted under the 2000 Option Plan initially was 300,000, which number automatically
increased on January 1 of each year by the lesser of (i) 4% of the total number of shares of common stock then outstanding or (ii)
10,000 shares. Subsequently, the Board of Directors and Stockholders approved several increases in the authorized number of options
to the 2000 Option Plan. The 2000 Option Plan expired in May 2010. At the time of expiration, the 2000 Plan had authorized the
Company to grant options to purchase a total of 1,320,000 shares. Upon the expiration of the 2000 Plan, the Company was no longer
able to grant any stock options to its employees, officers and directors. Accordingly, as of October 31, 2011, there were no shares
of common stock authorized by the Company to be issued under the 2000 Option Plan. However, there were options for 955,396 shares
that had been granted under the 2000 Plan, of which 732,969 were still outstanding and available for exercise.

On March 9, 2010, our Board of Directors
adopted the RF Industries, Ltd. 2010 Stock Incentive Plan (the “2010 Plan”). In June 2010, our stockholders
approved the 2010 Plan by vote as required by the NASDAQ Capital Market listing standards. Accordingly, the Company
may now make awards under the 2010 Plan as described below. The Board adopted the 2010 Plan because the Company’s prior stock
option plan, the 2000 Option Plan that was adopted in May 2000, expired on May 5, 2010. An aggregate of 1,000,000 shares of common
stock was set aside and reserved for issuance under the 2010 Plan. As of October 31, 2012, 525,768 shares of common stock were
remaining for future grants of stock options under the 2010 Plan.

Additional disclosures related to stock
option plans

The fair value of each option granted in
2012 and 2011 was estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions:

2012

2011

Expected volatility

46.6%-66.2

%

35.9%-55.8

%

Weighted-average volatility

57.7

%

52.7

%

Expected dividends

3.0%-5.0

%

1.9%-6.3

%

Expected term (in years)

3.5-4.2

2.5-3.5

Risk-free interest rate

0.3%-0.4

%

0.7%-1.2

%

Weighted average fair market value of options granted during the year

$

1.19

$

0.89

Weighted average fair market value of options vested during the year

$

1.02

$

0.94

Expected volatilities are based on historical
volatility of the Company’s stock. During fiscal 2012, the Company granted options to Board of Directors for the purchase
of 63,315 shares that vested immediately with an option life of five years, and options for a new employee the purchase of 50,000
shares with a vesting period of five years and an option life of six years. Since the Company has little historical experience
in determining the expected life of these new option terms, the Company used the simplified method to calculate the expected life
of these option grants. The expected life represents the period of time that options granted are expected to be outstanding. The
risk-free rate is based on the U.S. Treasury rate with a maturity date corresponding to the options’ expected life. The dividend
yield is based upon the historical dividend yield. The Company estimates forfeiture rates based upon historical exercise behavior.

Additional information regarding all of
the Company's outstanding stock options at October 31, 2011 and 2010 and changes in outstanding stock options in 2011 and 2010
follows:

2012

2011

Shares or Price Per Share

Weighted Average Exercise Price

Shares or Price Per Share

Weighted Average Exercise Price

Options outstanding at beginning of year

2,099,672

$

2.13

2,454,952

$

2.00

Options granted

114,815

3.86

178,009

3.24

Options exercised

(192,738

)

1.82

(517,817

)

1.90

Options forfeited

(16,968

)

3.05

(15,472

)

2.70

Options outstanding at end of year

2,004,781

$

2.25

2,099,672

$

2.13

Options exercisable at end of year

1,650,289

$

2.16

1,599,095

$

2.00

Options vested and expected to vest at end of year

1,987,333

$

2.25

2,070,866

$

2.02

Option price range at end of year

$

0.05 - $4.12

$

0.05 - $3.78

Aggregate intrinsic value of options exercised during year

$

396,976

$

693,490

F-16

Included in the options outstanding are 847,724 in
2012 and 907,724 in 2011 previously granted to six officers and/or key employees of the Company under employment agreements entered
into by the Company with each of these officers and employees.

Weighted average remaining contractual life of options outstanding
at October 31, 2012: 3.63 years.

Weighted average remaining contractual life of options exercisable
at October 31, 2012: 3.38 years.

Weighted average remaining contractual life of options vested
and expected to vest at October 31, 2012: 3.38 years.

Aggregate intrinsic value of options vested and expected to
vest at October 31, 2012: $4,255,276

As of October 31, 2012, $384,950 of expense
with respect to nonvested share-based arrangements has yet to be recognized and is expected to be recognized over a weighted average
period of 3.61 years.

Note 8 - Retirement plan

The Company sponsors a deferred savings
and profit sharing plan under Section 401(k) of the Internal Revenue Code. Substantially all of its employees may participate in
and make voluntary contributions to this defined contribution plan after they meet certain eligibility requirements. The Board
of Directors of the Company can authorize discretionary contributions by the Company. The Company did not make contributions to
the plan in 2012 or 2011.

Note 9 - Related party transactions

The note receivable from stockholder of
$66,980 at October 31, 2012 and 2011 is due from the Chief Executive Officer of the Company, bears interest at 6%, payable annually,
and has no specific due date. The note is collateralized by personal property owned by the Chief Executive Officer.

A former director of the Company is an employee
of the Company’s public relations firm. For the fiscal years ended October 31, 2012 and 2011, the Company paid the firm $43,093
and $52,684, respectively, for services rendered by that firm.

Note 10- Legal proceedings

From time to time, the Company is involved
in legal proceedings that are related to its business operations. The Company is not currently a party to any legal proceedings
that could have a material adverse effect upon its consolidated financial position or results of operations.

All of Cables Unlimited’s assets are
located in the United States. There were no earnouts or contingent considerations included in the acquisition agreement.

The acquisition was accounted for in accordance
with the acquisition method of accounting. The acquired assets and assumed liabilities were recorded by the Company at their estimated
fair values. The Company determined the estimated fair values with the assistance of appraisals or valuations performed by an independent
third party specialist. Cables Unlimited is an established fiber optic custom cable manufacturer based in Yaphank, New York. Cables
Unlimited is a Corning Cable Systems CAH Connections SM Gold Program member, authorized to manufacture optic products that are
backed by Corning Cable Systems' extended warranty. The products manufactured by Cables Unlimited include custom fiber optic cable
assemblies, adapters and electromechanical wiring harnesses for communications, computer, LAN, automotive and medical equipment.
These products supplement and enhance the existing markets of RF Industries as well as tap into new fiber optic cable markets that
the Company would not have been able to enter without incurring substantially more costs than incurred in the purchase of Cables
Unlimited. The capital and other resources required to enter the fiber optic market would have greatly exceeded the purchase price
of $5.6 million. These factors, among others, contributed to a purchase price in excess of the estimated fair value of Cables Unlimited’s
net identifiable assets acquired, and as a result, we have recorded goodwill in connection with this transaction.

Goodwill acquired was
allocated to our operating segment and reporting unit Cables Unlimited as part of the purchase price allocation. We do not expect
the goodwill recorded to be deductible for income tax purposes. Acquired amortizable intangible assets are being amortized on a
straight-line basis over their estimated useful lives ranging from 6 months to 9.6 years. The purchase price allocation was finalized
in the fourth quarter of fiscal 2011.

The following table summarizes the components
of the purchase price at fair value:

Cash consideration paid

$

2,800,000

RF Industries, Ltd. common shares issued (762,738 shares)

2,800,000

Total consideration

$

5,600,000

The following table summarizes
the allocation of the purchase price at fair value:

Other assets

$

6,000

Accounts receivable

814,000

Inventories

442,000

Property, plant and equipment

313,000

Intangible assets

2,415,000

Goodwill (all non-deductible for tax purposes)

3,076,000

Interest bearing liabilities

(7,000

)

Non-interest bearing liabilities

(423,000

)

Deferred tax liabilities

(1,036,000

)

Net assets

$

5,600,000

The results of Cables
Unlimited operations subsequent to June 15, 2011 have been included in the Company’s consolidated results of operations.
For the years ended October 31, 2012 and 2011, Cables Unlimited contributed approximately $10,913,000 and $2,644,000 to net
sales.

The following unaudited
pro forma financial information presents the combined operating results of RFI Industries, Ltd. and Cables Unlimited as if the
acquisition had occurred as of the beginning of the periods presented. Pro forma data is subject to various assumptions and estimates,
and is presented for informational purposes only. This pro forma data does not purport to represent or be indicative of the consolidated
operating results that would have been reported had the transaction been completed as described herein, and the data should not
be taken as indicative of future consolidated operating results.

F-18

Pro forma financial
information is presented in the following table:

(Unaudited)

Year ended October 31,

2011

Revenue

$

23,007,486

Net income

$

775,618

Earnings per share:

Basic

$

.12

Diluted

$

.11

Note 12- Variable interest entity

The Company’s
consolidated financial statements as of October 31, 2011 reflect consolidation of its variable interest entity, K&K Unlimited,
LLC (K&K), in accordance with U. S. GAAP. K&K was formed on August 14, 2009 for the purpose of establishing a separation
of legal ownership of the building where Cables Unlimited conducts its operations. Cables Unlimited’s former sole
stockholder is the sole member of K&K. Cables Unlimited was deemed the primary beneficiary of K&K even though it had no
direct ownership in K&K as it had the power to direct the activities of K&K that most significantly impacted its economic
performance and provided significant financial support through a lease agreement between Cables Unlimited and K&K. Cables Unlimited
was also guarantor of K&K’s mortgage notes payable to Teacher’s Federal Credit Union (“TFCU”) and Small
Business Administration (“SBA”) establishing a direct obligation to absorb any losses of K&K.

In November 2011, the
mortgage note to the SBA was paid in full, thereby releasing Cables Unlimited from any guarantee on said note. In addition, Cables
Unlimited was released as a guarantor on the mortgage note payable to TFCU, which was repaid through a refinancing by the member
of K&K on January 25, 2012. Based on these factors, it was determined that Cables Unlimited is no longer the primary beneficiary
and deconsolidated the operations of K&K as of January 25, 2012. As a result, the Company’s consolidated balance sheet
at October 31, 2012 reflects a reduction in total assets of approximately $1.6 million with a reduction in liabilities of approximately
$1.4 million. The effect of the deconsolidation did not have a material impact on the Company’s condensed consolidated results
of operations for the fiscal year ended October 31, 2012.

As of October 31, 2011,
K&K had assets of $1,627,346 ($66,926 in cash, $12,827 in other current assets, $1,476,925 in land and building, net and $70,668
in other assets) and liabilities of $1,413,730.

Note 13- Dividends declaration

The Company paid four
quarterly dividends of $0.05 per share for a total of $1,386,751 during the fiscal year ended October 31, 2012. The Company paid
dividends of $0.015, $0.02, $0.025, $0.05, and $0.25 per share for a total of $2,528,971 during the fiscal year ended October 31,
2011.

Note 14- Accrued expenses and other
long-term liabilities

Accrued expenses consist of the following
as of October 31:

2012

2011

Wages payable

$

1,031,537

$

932,398

Accrued receipts

864,270

556,678

Other current liabilities

205,884

90,369

Totals

$

2,101,691

$

1,579,445

Accrued receipts represent purchased inventory
for which invoices have not been received.

Other long-term liabilities consist of the
following as of October 31:

2012

2011

Tax related liabilities

$

-

$

79,222

Deferred lease liabilities

15,480

53,645

Totals

$

15,480

$

132,867

See Note 6 for discussion of the tax-related liabilities.
Deferred lease liabilities represent the excess of recognized rent expense over scheduled lease payments.

F-19

Note 15- Mortgages payable

In January 2010, K&K
acquired land and a building for $1,525,000. The purchase was financed through mortgage notes payable as follows:

·

Mortgage payable with TFCU in the amount
of $800,000, with interest at a rate per annum of 6.625%. Minimum monthly payments due of principal and interest of $5,490 commencing
March 1, 2010 through February 2020. The agreement included a financial covenant which required K&K to maintain a minimum debt
service coverage ratio. The note was guaranteed by Cables Unlimited and collateralized by K&K’s real property.
In November 2011, TFCU released Cables Unlimited as a guarantor on the mortgage. In addition, the mortgage was paid in full through
a refinancing in January 2012. The outstanding balance of $777,155 was classified as current in the consolidated balance
sheet at October 31, 2011.

·

In September 2010, K&K entered into
a mortgage payable with the Small Business Administration (“SBA”) in the amount of $643,000, with interest at a rate
per annum of 4.605%. Minimum monthly payments of principal and interest of $4,236 commencing October 1, 2010 through September
2030. The note was guaranteed by Cables Unlimited and the former owner of Cables Unlimited and was collateralized by K&K’s
real property. The note included two provisions that required the prior written consent of the SBA for significant changes
in ownership structure and/or the sale of property or assets not in the ordinary course of business. The former shareholder
of Cables Unlimited did not obtain prior written consent prior to selling 100% of his interest. As a result, the loan was
in default and was paid in full on November 7, 2011. The outstanding balance of $617,075 was classified as current in the
consolidated balance sheet at October 31, 2011.

The following summarizes
the information relative to the outstanding VIE debt at October 31, 2011:

Note payable - TFCU

$

777,155

Note payable - SBA

617,075

Total

$

1,394,230

Note 16- Authorized Number of Shares
of Common Stock

In 1987, the Company
had 100,000,000 shares of $.001 par value common stock authorized, and 29,999,998 shares of common stock outstanding. On April
17, 1987, the Company filed a Certificate of Secretary with the Nevada Secretary of State's office pursuant to which the Company
effected a 1-for-10 reverse stock split (that reduced the number of outstanding shares to 3,000,000). The Certificate of Secretary
did not, however, specifically address, or reduce the number of authorized shares of common stock.

Based on its belief
that the April 17, 1987 filing with the Nevada Secretary of State also reduced the number of authorized shares, the Company has
since 1987 reported in its financial statements that the number of authorized shares of common stock consisted of 10,000,000 shares
of $.01 par value common stock. On February 23, 2011, the Nevada Secretary of State's office notified the Company that based on
the April 17, 1987 filing, the authorized number of common shares of the Company consisted of 100,000,000 shares. As a result of
the two-for-one stock split that took place in the second quarter of 2011, the authorized number of common shares of the Company
as of October 31, 2011 consists of 200,000,000 shares of $.01 par value common stock.

At the Annual Meeting
of stockholders of the Company that was held on November 4, 2011, the stockholders approved an amendment to our Articles of Incorporation
to decrease the number of the Company's authorized shares of common stock from 200,000,000 shares to 20,000,000 shares. The amendment
to the Company’s Articles of Incorporation was filed with the Nevada Secretary of State on November 4, 2011. Accordingly,
the authorized number of shares of the Company’s Common Stock currently is 20,000,000 shares.

Note 17- Stock Split

On February 11, 2011,
the Company announced that the Board of Directors had declared a two-for-one stock split on the Company’s Common Stock. The
stock split was effected on March 10, 2011. All references to common stock and per share information, except par value, in these
consolidated financial statements and notes have been adjusted to reflect the effects of the stock split.

Note 18- Subsequent Events

At its December 6, 2012 meeting, the Board
of Directors approved a $0.10 dividend to be paid on December 28, 2012 to stockholders of record on December 17, 2012.

F-20

SIGNATURE

In accordance with Section 13 or 15 (d)
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.